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THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

RIVERSIDE 


MEDIATION,  INVESTIGATION,  AND 

ARBITRATION  IN  INDUSTRIAL 

DISPUTES 


MEDIATION,  INVESTIGATION 
^AND  ARBITRATION  IN 
INDUSTRIAL  DISPUTES 


BY 

GEORGE  E.  BARNETT,  Ph.D. 

PROFESSOR   OF  STATISTICS,   THE  JOHNS  HOPKINS  UNIVERSITT 
AND 

DAVID  A.  McCABE,  Ph.D. 

ASSISTANT  PROFESSOR  OF  ECONOMICS,   PRINCETON   UNIVERSITY 


D.  APPLETON  AND  COMPANY 
NEW  YORK         LONDON 

1916 


37 


COPTRIOHT,  1916,  HT 

D.  APPLETON  AND  COMPANY 


Printed  in  the  United  States  of  America 


PREFACE 

This  study  of  Mediation,  Investigation,  and 
Arbitration  is  based  on  a  report  submitted  in 
June,  1915,  by  the  writers  to  the  Commission  on 
Industrial  Relations.  A  considerable  amount  of 
illustrative  material  has  been  added,  the  state- 
ments have  been  brought  down  to  date,  and  some 
revision  has  been  made  in  the  form  of  presentation, 
but  the  argument  and  the  proposals  remain  un- 
changed. 

It  should  be  understood  that  the  authors  alone 
are  responsible  for  the  views  here  expressed.  For 
convenience  in  comparison  there  are  added  in  the 
Appendices  (II-IV)  extracts  from  the  Final  Re- 
port of  the  Commission,  in  which  are  presented 
the  views  of  the  members  of  the  Commission  on 
the  matters  dealt  with  here. 

The  authors  wish  to  express  their  appreciation 
of  the  kindness  and  courtesy  of  the  many  state 
officials,  employers,  trade  union  officers,  and  other 
workmen  who  supplied  information  for  the  orig- 

V 


PREFACE 

inal  report.  We  are  pleased  to  acknowledge  our 
indebtedness  to  Dr.  L.  A.  Rufener  for  the  opportu- 
nity of  examining  several  chapters  of  his  thesis  on 
"The  Work  of  the  Massachusetts  Board  of  Con- 
ciliation and  Arbitration"  and  for  other  valuable 
suggestions  as  to  sources  of  information  in  that 
State. 

G.  E.  B., 

D.  A.  McC. 


CONTENTS 

PART  I 

STATE  AGENCIES  OF  MEDIATION,  INVESTIGA- 
TION AND  ARBITRATION 

PAGE 

Introduction 3 

CHAPTER 

I.     Mediation 7 

Existing  Law.  Types  of  Mediatorial 
Service.  Limitations  of  Mediation.  Char- 
acteristics of  a  Successful  System. 

II.     Investigation 66 

Existing  Law.  Results.  Plan  for  Boards 
of  Mediation  and  Investigation. 

III.     Arbitration 89 

Existing   Law.     Results.     Possibilities   of 
Arbitration  Service  by  a  Permanent  Board. 
Plan    for    a    Board    of   Arbitration.     En- 
couragement    of     Formation     of     Special 
Boards. 
IV.     Proposed  Plan  for  a  State  System  of 
Mediation,    Investigation    and   Arbi- 
tration       Ill 

PART  II 
NATIONAL  AGENCIES  OF  MEDIATION,  INVESTI- 
GATION AND  ARBITRATION 

V.     Proposed  New  Agencies 129 

The  Need  for  New  National  Agencies. 
Proposed  Agencies  of  Mediation,  Arbitra- 
tion and  Investigation.  The  Mediation 
Commission. 

vii 


CONTENTS 

CHAPTEm  PAGE 

VI.  Proposed  Plan  of  a  National  System 
op  Mediation,  Investigation  and  Ar- 
bitration   154 

Organization.  Powers,  Duties  and  Juris- 
diction.    Cooperation. 

PART  III 

APPENDICES 

Appendix  I.     The  Newlands  Act    .      .      .      .165 

Appendix  II.     Report  of  the  Commission  on 

Industrial   Relations 181 

Extracts  from  the  report  of  Mr.  Basil  M. 
Manly,  Director  of  Research  and  Investi- 
gation. 

Appendix  III.     Report  of  the  Commission  on 

Industrial  Relations 193 

Extracts  from  the  supplemental  statements 
of  Commissioners  Lennon,  O'Connell,  Gar- 
rettson  and  Walsh. 

Appendix  IV.     Report  of  the  Commission  on 

Industrial  Relations 201 

Extracts  from  the  report  of  Commissioners 
Commons  and  Harriman  and  from  the  joint 
supplemental  report  of  Commissioners 
Weinstock,  Ballard  and  Aishton. 


Vlll 


STATE  AGENCIES  OF  MEDIA- 
TION, INVESTIGATION 
AND  ARBITRATION 


INTRODUCTION 

A  very  large  proportion  of  the  American 
States  have  made  provision  in  their  laws  for 
agencies  of  mediation,  public  investigation, 
and  arbitration  in  labor  disputes.  For  a 
study  of  these  agencies,  however,  attention 
can  most  profitably  be  centered  on  a  few 
states,  since  the  arrangements  in  other  states 
are  merely  duplications  of  these  few  or  else 
the  machinery  provided  by  law  is  not  in  op- 
eration to  any  important  extent.  The  pres- 
ent study  is  based  on  a  survey  of  the  agencies 
in  Massachusetts,  New  York  and  Ohio.1 
All  three  are  important  industrial  states  and 
possess  highly  diversified  groups  of  indus- 
tries.    Moreover,  the  present  work  of  the 

1  Since  this  study  was  begun  the  State  of  Colorado 
has  adopted  a  law  (April  12,  1915)  requiring  thirty 
days'  notice  of  proposed  changes  in  wages  or  other 
terms  of  employment  and  forbidding  strikes  and  lock- 
outs until  after  a  board  of  investigation  appointed  by 

3 


INTRODUCTION 

agencies  of  mediation,  arbitration  and  public 
investigation  in  these  states  is  at  least  equal 
in  quality  to  that  in  the  other  states  and  these 
states  present  further  advantage  for  the  in- 
vestigator in  that  they  were  among  the 
earliest  to  establish  agencies  of  mediation 
and  arbitration. 

Much  has  been  accomplished  by  these 
agencies  in  all  three  of  these  states  in  the  way 
of  reestablishing  and  promoting  industrial 
peace.  As  among  the  three  kinds  of  activi- 
ties of  such  agencies,  it  is  clear  that  up  to  the 
present  by  far  the  best  results  have  been  ob- 
tained through  mediation.  With  the  excep- 
tion of  Massachusetts,  state  agencies  of 
arbitration  have  been  rarely  used.  Public 
investigation  after  failure  to  secure  the  set- 
tlement of  a  strike  or  lockout  by  mediation 

the  State  Industrial  Commission  has  reported  its  find- 
ings on  the  matters  in  dispute.  This  is  the  first  law 
of  its  kind  in  the  United  States  but  it  has  not  yet 
been  in  operation  long  enough  to  give  results  of  value 
for  this  study. 

4 


INTRODUCTION 

has  also  been  used  sparingly.  It  has  been  re- 
sorted to  very  rarely  in  Ohio,  and  until  the 
last  two  or  three  years  in  only  a  few  cases  in 
New  York  and  Massachusetts. 

The  results  achieved  by  the  mediators  and 
arbitrators  in  the  states  studied  strongly  sup- 
port the  conclusion  that  state  agencies  of 
mediation,  investigation,  and  arbitration,  if 
properly  constituted  and  properly  manned, 
would  be  of  great  service  in  all  the  industrial 
states  in  preventing  the  outbreak  of  strikes 
or  lockouts  and  in  bringing  to  an  earlier  con- 
clusion a  large  proportion  of  those  which 
they  are  unable  to  prevent.  This  conclusion 
is  confirmed  by  interviews  with  many  whose 
difficulties  the  state  mediators  failed  to  com- 
pose and  who  declined  to  submit  the  matters 
at  issue  to  arbitration  by  existing  state 
boards.  These  persons  naturally  emphasized 
the  desirability  of  having  properly  qualified 
persons  to  act  as  mediators,  investigators 

5 


INTRODUCTION 

or  arbitrators.  The  vital  importance  of 
the  proper  constitution  of  the  agencies  as 
to  personnel  as  well  as  to  powers  and  duties 
was  otherwise  made  clearly  evident,  as  will 
appear  at  several  points  in  the  description  of 
the  agencies  and  their  work. 

For  convenience  in  comparison,  the  de- 
scription of  the  systems  in  the  three  states 
has  been  divided  into  three  sections  entitled 
respectively  Mediation,  Public  Investigation, 
and  Arbitration. 


MEDIATION 

In  discussing  the  subject  of  mediation  it 
will  be  most  convenient  to  consider  first  the 
existing  legal  provisions  for  mediation  in  the 
three  States  and  the  results  obtained  under 
these  laws.  That  will  be  followed  by  an 
analysis  of  the  possibilities  of  state  mediation 
under  proper  agencies  as  evidenced  by  the 
experience  of  the  existing  agencies.  A  plan 
for  the  constitution,  manning,  and  operation 
of  a  state  agency  of  mediation,  which,  the  re- 
sults of  this  study  indicate,  is  the  plan  most 
likely  to  lead  to  the  realization  of  the  possi- 
bilities of  service  open  to  a  state  agency  of 
mediation,  will  then  be  outlined  and  ex- 
plained. 

7 


MEDIATION  AND  ARBITRATION 

•  • ;( *■      t  TOisiiNO  law 

The]  \&f£^*Grs.-^I*i  Massachusetts  the 
law  provides  that  the  State  Board  of  Con- 
ciliation and  Arbitration  shall  exercise  the 
function  of  mediation.  The  board  consists 
of  three  salaried  persons  appointed  by  the 
Governor.  One  member  must  be  an  em- 
ployer or  selected  from  an  association  repre- 
senting employers,  and  one  must  be  selected 
from  a  labor  organization.  The  third  mem- 
ber is  nominated  by  the  other  two  if  they  are 
able  to  agree  upon  a  third  within  a  specified 
time.  As  a  matter  of  fact,  they  always  have 
been  able  to  agree.  The  board  has  a  perma- 
nent secretary,  who,  in  addition  to  his  other 
duties,  often  acts  as  a  mediator  for  the  board. 

The  Ohio  machinery  for  conciliation  and 
arbitration,  until  1913,  was  the  same  as  that 
of  Massachusetts,  except  that  the  members 
of  the  board  did  not  receive  an  annual  salary 

8 


MEDIATION 

but  were  paid  at  the  rate  of  five  dollars  a  day 
when  acting  for  the  board,  and  that  one  of 
the  members  of  the  board  acted  as  secretary. 
The  act  creating  the  Industrial  Commission 
of  Ohio,  adopted  in  1913,  abolished  the  State 
Board  of  Arbitration  and  Conciliation,  and 
conferred  upon  the  Industrial  Commission 
the  duty  and  power  of  promoting  voluntary 
arbitration  and  mediation.  The  law  pro- 
vides that  the  commission  shall  designate  a 
deputy  to  be  known  as  chief  mediator  and 
may  detail  other  deputies  to  act  as  his  assist- 
ants. In  November,  1914,  the  commission 
assigned  its  chief  statistician  to  serve  also  as 
chief  mediator.  Assistant  mediators  have 
not  yet  been  specifically  appointed,  but  two 
members  of  the  staff  of  the  Division  of  Sta- 
tistics have  in  several  cases  acted  in  that  ca- 
pacity. 

In  New  York  the  function  of  mediation  is 
intrusted  to  a  chief  mediator  and  his  assist- 


MEDIATION  AND  ARBITRATION 

ants,  who  are  appointed  by  the  Industrial 
Commission.  Prior  to  the  recent  law  estab- 
lishing an  Industrial  Commission  (effective 
May  22,  1915),  the  chief  mediator  and  his 
assistants  were  appointed  by  the  Commis- 
sioner of  Labor.  Under  the  new  law  the 
functions  formerly  discharged  by  the  Com- 
missioner of  Labor  have  been  taken  over 
by  the  Industrial  Commission  and  general 
supervision  of  the  work  of  the  Bureau  of 
Mediation  and  Arbitration  is  assigned  to  one 
of  the  members  of  the  commission.  The 
chief  mediator  is  also  the  third  deputy  com- 
missioner, instead  of  second  deputy  commis- 
sioner of  labor  as  under  the  old  law.  Other- 
wise the  law  remains  unchanged.  The  chief 
mediator  is  still  in  immediate  charge  of  the 
Bureau  of  Mediation  and  Arbitration  and, 
as  for  several  years  past,  has  four  assistants. 
One  of  these  has  the  title  of  industrial  medi- 
ator and  two  that  of  assistant  mediator. 
10 


MEDIATION 

The  fourth  is  a  special  agent  attached  to  the 
bureau. 

When  Mediation  Occurs. — In  Massa- 
chusetts the  board  is  obliged  by  law  to  offer 
mediation  when  notified  by  either  party,  or 
by  the  local  authorities,  that  a  strike  or  lock- 
out is  seriously  threatened  or  has  actually 
occurred.  It  intervenes  as  a  matter  of 
course  in  many  other  cases.  In  fact,  over 
half  its  interventions  are  made  without  pre- 
vious official  notification.  Its  policy  is  to  at- 
tempt to  mediate  in  all  cases  of  importance 
coming  to  its  knowledge.  The  New  York 
law  requires  that  an  officer  or  agent  of  the 
Bureau  of  Mediation  "shall,  if  practicable, 
proceed  promptly  to  the  locality"  in  which 
the  strike  or  lockout  is  threatened  or  has  oc- 
curred and  "endeavor  by  mediation  to  effect 
an  amicable  settlement  of  the  controversy." 
No  strike  or  lockout  involving  a  considerable 
number  of  men  goes  on  for  more  than  a  few 
11 


MEDIATION  AND  ARBITRATION 

days  without  an  offer  of  mediation  from  the 
bureau,  if  the  bureau  learns  of  the  trouble 
— and  a  serious  disturbance  would  not  escape 
its  knowledge  long.  In  Ohio,  the  present 
law  does  not  specify  when  mediation  shall  be 
offered.  The  mediators  have  acted  in  very 
few  disputes  in  which  their  intervention  was 
not  requested.  It  has  been  the  policy  of 
the  chief  mediator  not  to  intervene  without 
invitation  unless  the  case  was  of  unusual  im- 
portance because  of  the  number  of  persons 
involved  in  the  strike  or  lockout,  the  incon- 
venience suffered  by  the  public,  or  the  out- 
break of  violence. 

General  Results  of  Mediation. — The 
Massachusetts  board,  the  New  York  bureau, 
and  the  chief  mediator  and  his  assistants  in 
Ohio  have  done  work  of  great  value  in  their 
respective  States  in  preventing  strikes  and 
securing  settlements  of  strikes  or  lockouts 
which  have  already  occurred.     Relative  to 

12 


MEDIATION 

the  total  number  of  strikes  and  lockouts 
in  these  States  since  the  establishment  of 
mediation  machinery,  the  number  in  which 
settlements  have  been  secured  by  the  medi- 
ators does  not  loom  up  large;  but  if  the 
cases  in  which  the  intervention  of  the  medi- 
ator or  mediators  has  been  followed  by  a  set- 
tlement agreed  to  in  a  conference  called  by 
the  mediator,  or  agreed  to  by  each  party 
separately  with  the  mediator  acting  as  an 
intermediary,  be  considered  absolutely,  the 
value  of  the  results  obtained  by  mediation  in 
preventing  or  shortening  the  term  of  strikes 
and  lockouts  is  apparent. 

TYPES  OF  MEDIATORIAL  SERVICE 

The  experience  of  the  Massachusetts,  New 
York,  and  Ohio  mediators  makes  it  clear 
that  there  is  an  opportunity  for  competent 
mediators  to  render  several  distinct  types  of 
service  in  bringing  to  an  agreement  parties 
13 


MEDIATION  AND  ARBITRATION 

who  have  been  unable  to  reach  an  agreement 
by  themselves.  These  will  be  taken  up.  in 
order. 

1.  Many,  if  not  most,  strikes  and  lockouts 
occur  before  the  matters  in  dispute  have  been 
thoroughly  thrashed  out  and  before  either 
side  has  indicated  the  utmost  that  it  is  willing 
to  concede  to  secure  a  settlement.  It  hap- 
pens occasionally  that  the  terms  that  each 
side  is  willing  to  accept  if  it  can  get  no  bet- 
ter terms  are  such  as  to  make  a  settlement 
possible,  yet  there  are  obstacles  to  the  frank 
negotiations  which  would  make  this  clear. 
Obviously  these  obstacles  are  more  likely  to 
be  present  if  the  employer  and  the  workmen 
have  already  broken  off  friendly  relations. 
The  strike  or  lockout  usually  throws  the 
parties  apart  in  irritation,  if  not  in  anger, 
and  neither  is  in  a  mood  for  calm  discussion 
or  frank  bargaining.  One  side  or  both  may 
be  unwilling  to  ask  the  other  for  a  conference. 

14 


MEDIATION 

In  many  cases  the  employer  is  irritated  be- 
cause a  strike  has  been  called  without  what 
he  considers  sufficient  warning  or  discussion 
of  the  workmen's  demands.  In  other  cases 
the  employer  is  unaccustomed  to  dealing  with 
a  union  and  is  irritated  because  union  of- 
ficials not  in  his  employ  are  asking  to  be  dealt 
with  as  the  representatives  of  his  workers. 
Employers  in  this  frame  of  mind  will  not  go 
into  conference  with  the  workers'  representa- 
tives at  the  request  of  the  latter.  On  the 
other  hand,  the  workers  may  be  incensed  at 
what  they  consider  the  too  light  treatment  of 
their  demands  by  the  employer,  or  his  failure 
to  treat  their  representatives  with  proper  con- 
sideration, and  are  determined  to  stand  out 
until  the  employer  accepts  their  demands  or 
asks  their  representatives  for  a  meeting  for 
the  discussion  of  their  terms. 

The  service  which  the  successful  mediators 
have  rendered  in  situations  of  this  kind  is  that 
15 


MEDIATION  AND  ARBITRATION 

of  getting  before  each  party  the  fact  that 
there  are  terms  which  both  sides  are  really 
willing  to  accept  as  a  settlement.  The 
method  which  has  been  followed  in  most  cases 
by  the  state  mediators  is  that  of  bringing  the 
parties  together  in  a  conference  with  the 
mediator  and  persuading  them  to  discuss 
their  differences  calmly  and  frankly.  If  the 
terms  each  is  willing  to  accept  can  be  brought 
out  in  a  conference  of  this  kind  the  settlement 
by  joint  agreement  will  follow  as  a  matter  of 
course.  The  task  of  the  mediator  is  to  over- 
come the  reluctance  of  one  or  both  parties  to 
meeting  the  other  in  conference  and  to  keep 
them  from  still  further  irritating  each  other 
when  they  come  together. 

Most  of  the  settlements  secured  by  the 
state  mediators  have  been  secured  through 
such  joint  conferences.  If  the  parties  can 
be  induced  to  hold  a  conference  of  this  kind 
and  a  settlement  results,  a  long  step  has  been 
16 


MEDIATION 

taken  toward  collective  bargaining  for  the 
future.  The  fact  that  they  have  met  and 
discussed  issues  with  each  other  directly  and 
have  arrived  at  an  agreement  on  the  points 
in  dispute  makes  it  much  more  likely  that 
when  differences  arise  later  the  parties  will 
meet  in  joint  conference  on  their  own  initi- 
ative and  attempt  to  adjust  their  differences 
by  negotiation. 

A  relatively  large  number  of  the  settle- 
ments which  have  been  secured  by  mediators 
through  bringing  the  parties  into  conference 
have  been  in  cases  in  which  the  strike  or  lock- 
out was  threatened  or  prolonged  because  of 
the  refusal  of  the  employer  to  confer  with 
any  representative  of  a  union.  It  frequently 
happens  that  an  employer  refuses  to  meet  a 
trade  union  official  on  the  ground  that  he  will 
deal  only  with  his  own  employees,  when,  as  a 
matter  of  fact,  the  higher  trade  union  official 
is  the  one  man  on  the  workers'  side  who  has 
17 


MEDIATION  AND  ARBITRATION 

the  authority,  grasp  of  the  situation,  and 
temperament  to  negotiate  a  satisfactory  set- 
tlement. For  example,  the  employer  may 
refuse  to  "recognize  the  union"  to  the  extent 
of  dealing  with  a  union  officer,  because  he  as- 
sumes that  recognizing  the  union  necessarily 
involves  accepting  the  closed  shop  rule,  al- 
though the  union  may  be  one  that  is  willing 
to  make  an  agreement  without  that  rule. 
Under  these  circumstances,  if  the  mediator 
can  get  the  employer  and  the  proper  union 
officer  together  in  a  frank  conference,  the 
employer  may  have  his  fears  removed  and 
find  that  the  union  officer  is  willing  to  accept 
terms  that  the  employer  is  willing  to  grant. 

The  mediator  has  frequently  succeeded  in 
getting  the  parties  together,  after  one  has 
definitely  refused  to  confer  with  the  other  di- 
rectly, by  inviting  both  into  conference  with 
him  at  the  same  time  and  place.  An  em- 
ployer who  has  refused  to  confer  with  a  trade 

18 


MEDIATION 

union  officer  will  often  come  to  a  conference 
with  the  mediator  even  though  he  knows  that 
one  or  more  representatives  of  the  union  will 
be  there,  because  he  feels  that  he  is  going 
to  a  conference  primarily  with  the  mediator, 
and  is  not  dealing  with  the  union  representa- 
tives as  such.  He  goes  as  a  matter  of  cour- 
tesy to  the  mediator.  A  conference  of 
this  kind  may  develop,  and  often  has  de- 
veloped, into  a  direct  conference  between  the 
interested  parties  and  finally  into  a  set- 
tlement. 

Numerous  instances  of  settlements  secured 
in  this  way  could  be  given.  A  good  illustra- 
tive case  is  that  of  the  settlement  of  a  strike 
of  the  employees  of  a  rope  factory  in  Auburn, 
New  York,  in  March,  1913.  This  case  pre- 
sented a  familiar  problem,  that  of  the  refusal 
of  an  employer  to  deal  with  the  representa- 
tives of  a  newly  formed  union  of  his  em- 
ployees. The  strike  occurred  because  sev- 
19 


MEDIATION  AND  ARBITRATION 

eral  employees  who  were  officers  of  recently- 
organized  local  unions  of  the  United  Textile 
Workers  were  discharged.  After  the  strike 
had  been  inaugurated  the  strikers  made  wage 
demands  and  also  demanded  the  recognition 
of  their  unions.  The  president  of  the 
United  Textile  Workers  then  went  to 
Auburn  to  advise  the  strikers  and  otherwise 
aid  in  the  conduct  of  the  strike.  When  the 
state  mediators  arrived  at  Auburn  they 
found  that  the  officials  of  the  company  were 
unwilling  to  deal  with  either  the  officers  of 
the  local  union  or  the  president  of  the  na- 
tional union,  and  that  the  strikers  were  firm 
in  their  refusal  to  go  back  until  they  had  re- 
ceived concessions  as  an  organized  body. 
The  chief  mediator,  with  the  assistance  of  one 
of  the  directors  of  the  company,  finally  pre- 
vailed on  the  president  of  the  company  to 
meet  the  president  of  the  national  union  un- 
officially. This  meeting  led  to  a  formal  con- 
20 


MEDIATION 

ference,  in  which  the  local  union  committee 
was  included,  and  at  this  conference  terms  of 
settlement  were  agreed  upon. 

A  similar  example  may  be  taken  from  the 
mediation  activities  of  the  Massachusetts 
board.  A  few  years  ago  350  glass  cutters 
were  locked  out  by  an  employer  in  New  Bed- 
ford in  anticipation  of  a  wage  demand,  and 
the  employer  refused  to  meet  the  president  of 
the  American  Flint  Glass  Workers'  Union, 
who  had  taken  charge  of  the  dispute  for  the 
men.  Fortunately  for  the  settlement  of  that 
case  the  employers'  representative  on  the 
board  was  a  citizen  of  New  Bedford  and  the 
president  of  the  union  appealed  to  him  to  use 
his  good  offices  to  bring  about  a  conference. 
The  member  of  the  board  secured  a  confer- 
ence between  the  employer  and  the  president 
of  the  union  and  an  agreement  was  quickly 
reached. 

After  the  parties  have  been  brought  into 
21 


MEDIATION  AND  ARBITRATION 

joint  conference  it  is  difficult,  sometimes,  to 
keep  them  together.  Before  the  parties  can 
clear  up  matters  sufficiently  to  see  their  way 
to  an  agreement,  suspicions  may  arise  on  one 
side  or  both  as  to  the  real  motives  of  the  other 
in  negotiating.  In  April,  1913,  for  example, 
the  Massachusetts  board  learned  that  a  strike 
of  telephone  operators  in  Boston  was  immi- 
nent. After  interviewing  the  parties  sepa- 
rately, the  board  was  able  to  bring  them 
together  in  a  three-cornered  conference. 
Such  good  progress  was  made  in  this  confer- 
ence that  the  board  advised  them  to  confer 
by  themselves  until  all  the  differences  on 
which  they  could  reach  agreement  were  dis- 
posed of,  and  to  consider  submitting  to  arbi- 
tration any  points  on  which  they  found  they 
could  not  agree.  The  parties  agreed  to  do 
this  and  to  reach  a  decision  on  the  arbitra- 
tion suggestion  in  two  days. 

But  the  following  day,  Tuesday,  operators 
22 


MEDIATION 

began  to  arrive  in  Boston  from  other  cities, 
to  take  the  places  of  those  operators  who 
might  go  on  strike.  This  threatened  seri- 
ously to  put  an  end  to  the  negotiations,  as 
the  operators  feared  that  the  company  was 
continuing  the  conferences  merely  to  gain 
time  to  bring  in  strike-breakers.  The  board 
then  got  in  touch  with  the  parties  again. 
The  company  explained  that  it  was  willing 
to  continue  negotiations  in  entire  good  faith, 
but  it  had  to  be  prepared  to  continue  its  serv- 
ice in  case  no  agreement  could  be  reached  and 
a  strike  should  take  place.  Both  parties 
then  agreed  to  resume  the  conference  the 
next  day,  Wednesday.  At  the  request  of 
the  workers  a  committee  from  the  Boston 
Chamber  of  Commerce  met  with  the  parties 
and  also  acted  at  times  as  a  confidential  go- 
between.  The  conferences  lasted  all  through 
Wednesday  and  through  Wednesday  night 
until  five  o'clock  Thursday  morning,  at 
23 


MEDIATION  AND  ARBITRATION 

which  time  a  settlement  was  agreed  to  by  the 
parties. 

2.  In  a  smaller  number  of  cases  the  medi- 
ators have  brought  about  a  settlement  by 
acting  as  confidential  intermediaries  between 
the  parties.  In  these  cases  each  party  agrees 
conditionally  to  certain  terms  with  the  inter- 
mediary without  knowing  what  the  other 
party  is  willing  to  concede.  It  frequently 
happens  that  the  parties,  though  willing  to 
confer  with  each  other,  will  not  disclose  to 
each  other  the  most  they  will  concede  in  order 
to  get  a  settlement.  Each  may  fear  that  if 
it  offers  a  concession  contingent  upon  the 
yielding  of  some  particular  thing  by  the 
other  side,  the  latter  will  take  this  offer  as  a 
sign  of  weakness  and  refuse  to  concede  as 
much  as  it  otherwise  would.  Each  side  thus 
allows  the  conferences  to  end  without  stating 
its  best  terms,  in  the  hope  that  the  other  will 
speedily  offer  better  terms,  when,  as  a  mat- 
24 


MEDIATION 

ter  of  fact,  the  most  one  is  willing  to  give  and 
the  least  the  other  will  take  are  really  over- 
lapping. 

This  is  not  likely  to  occur  in  a  well  de- 
veloped system  of  collective  bargaining. 
Where  such  systems  have  been  long  estab- 
lished, neither  party  will  ordinarily  allow  the 
conferences  to  end  in  a  disagreement  without 
stating  the  limit  it  is  willing  to  go  at  that 
time  to  reach  a  settlement.  In  other  words, 
each  side  will  offer  as  good  terms  to  the  other 
directly  as  it  would  be  willing  to  offer  confi- 
dentially to  an  intermediary.  But  where  the 
joint  conference  method  of  collective  bar- 
gaining is  not  well  developed,  deadlocks  due 
merely  to  lack  of  frankness  are  likely  to 
occur.  This  liability  is  especially  great  if 
the  parties  are  looking  forward  to  the  possi- 
bility of  arbitration  in  case  no  settlement  is 
reached  in  conference.  Each  side  is  then 
fearful  of  offering  a  concession  in  conference 
25 


MEDIATION  AND  ARBITRATION 

which  will  be  assumed  as  a  starting  point  by 
the  other  if  negotiations  are  broken  off  and 
later  resumed  or  if  the  whole  case  is  later 
submitted  to  arbitration. 

In  all  cases  of  this  kind  the  problem  of  the 
mediator  is  not  to  get  the  parties  together  in 
conference,  but  to  secure  from  each  side  a 
confidential  statement  of  the  limits  of  its 
position.  He  has  then  merely  to  get  each 
party  to  agree  with  the  other  to  terms  al- 
ready agreed  to  conditionally  with  him.  It 
is  this  confidential  intermediary  type  of 
mediation  which  has  proved  so  successful  in 
federal  mediation  in  interstate  railway  dis- 
putes under  the  Erdmann  and  Newlands 
acts.  In  intrastate  disputes  confidential  in- 
termediary action  seems  most  likely  to  be 
successful  in  disputes  involving  recently 
organized  workers.  In  such  cases  an  em- 
ployer will  often  accept  mediation  of  this 
kind  in  preference  to  entering  a  joint  or  even 

26 


MEDIATION 

a  three-cornered  conference,  since  it  com- 
mits him  to  nothing.  If  the  employees  will 
not  accept  the  terms  which  he  is  willing  to 
grant,  his  own  position  is  not  weakened  by 
the  public  offer  of  concessions. 

The  chief  mediator  of  Ohio  has  found  this 
confidential-intermediary  type  of  mediation 
the  more  acceptable  type.  "Joint  confer- 
ences," he  states,  "except  in  cases  where  the 
employees  have  been  organized  for  a  number 
of  years  and  are  accustomed  to  dealing  with 
their  employers  through  committees,  are 
often  productive  of  bitterness  and  for  that 
reason  are  seldom  held  by  the  mediators." 
Apart  from  this,  however,  he  favors  the  con- 
fidential type  of  mediation  as  a  matter  of 
policy  because,  as  he  puts  it,  "mediation 
under  this  plan  does  not  disclose  to  either 
side  either  the  weak  points  or  the  strong 
points  in  the  position  of  the  opposing  side."  * 


1  These  statements  are  taken  from  a  report  pre- 

27 


MEDIATION  AND  ARBITRATION 

Mediation  of  this  intermediary  type  in 
strikes  involving  unorganized  workers,  even 
when  it  is  successful,  is  naturally  less  likely 
to  result  in  a  direct  agreement  between  the 
parties  than  when  the  terms  of  agreement 
are  worked  out  in  joint  conference.  The 
Ohio  mediators  have,  however,  brought 
about  some  direct  agreements  by  inter- 
mediary mediation  in  strikes  of  this  kind. 

The  Massachusetts  mediators  generally 
try  to  bring  the  parties  together  in  conference 
as  soon  as  possible,  but  at  times  find  it  neces- 
sary to  secure  conditional  agreement  to  sug- 
gested terms  of  settlement  from  each  party 
separately  before  bringing  the  parties  to- 
gether. For  example,  a  textile  strike  of  700 
operatives  in  two  mills  in  Barre  in  March, 
1912,  was  brought  to  an  end  in  this  way. 

pared  by  the  chief  mediator,  Mr.  Fred  C.  Croxton,  on 
"  Mediation  of  Industrial  Disputes  in  Ohio,  January, 
1914  to  June,  1916,"  published  in  the  Bulletin  of  the 
Industrial  Commission  of  Ohio,  Vol.  Ill,  No.  4. 

28 


MEDIATION 

The  hours  of  the  women  workers  had  to  be 
reduced  from  fifty-six  to  fifty-four  to  con- 
form with  the  new  state  law  and  the  hours 
of  all  employees  were  similarly  reduced. 
This  raised  the  question  of  the  rates  of  wages 
to  be  paid.  The  workers  demanded  an  in- 
crease of  fifteen  per  cent  and  the  employers 
were  willing  to  give  but  five.  After  five 
days  there  was  considerable  violence  and  ar- 
rests were  made.  Four  days  later  the  board 
was  able  to  bring  both  sides  to  an  agreement 
through  separate  negotiations  with  each. 
The  next  day  both  parties  were  brought  into 
conference  with  the  board  and  the  agreement 
ratified. 

3.  In  the  above  classes  of  cases  the  dispute 
was  finally  terminated  by  an  agreement 
made  between  the  parties.  Each  agreed  to 
terms  directly  with  the  other  after  agreeing 
to  them  separately  with  the  mediator.  In 
addition  there  have  been  cases  in  all  three 
29 


MEDIATION  AND  ARBITRATION 

States  in  which  the  mediators  have  been  able 
to  secure  a  settlement  by  a  separate  agree- 
ment with  ekch  party  when  one  party  would 
not  make  an  agreement  with  the  other.  The 
employer  or  employers  may  be  determined 
not  to  make  an  agreement  with  the  strikers 
as  a  body  while  on  strike ;  the  strikers,  on  the 
other  hand,  may  be  resolved  not  to.  return  to 
work  unless  assured  of  certain  concessions. 
In  some  of  these  cases  the  mediators  have  re- 
ceived guarantees  from  the  employers  that 
certain  things  would  be  done  by  the  em- 
ployers after  the  employees  had  returned  to 
work,  and  have  persuaded  the  men  to  return 
to  work  on  their  assurance  that  these  conces- 
sions would  be  granted. 

The  New  York  mediators  were  able  to  set- 
tle two  important  strikes  in  this  way  in  1913. 
In  January,  1913,  3,000  garment  workers  in 
Rochester  went  on  strike.  They  presented 
no  demands  when  they  left  the  factories, 
30 


MEDIATION 

other  than  to  complain  that  the  factories 
were  doing  work  for  houses  in  New  York 
City  whose  employees  were  on  strike.  Dur- 
ing the  next  two  days  many  other  garment 
workers  joined  the  strikers  and  the  em- 
ployers announced  on  Saturday  that  if  the 
strikers  did  not  return  on  Monday  their  es- 
tablishments would  be  closed.  As  the 
strikers  did  not  return,  the  factories  were 
closed.  The  number  of  those  then  idle 
reached  10,000.  The  state  mediator  came 
into  the  dispute  a  few  days  later  and  at- 
tempted to  arrange  a  conference  of  the  par- 
ties by  personal  interviews,  but  unsuccess- 
fully. He  then  attempted,  by  writing  to  the 
parties,  to  get  each  to  agree  to  a  conference. 
The  representatives  of  the  workers  signified 
their  willingness  to  attend  any  conference  he 
might  be  able  to  arrange,  but  the  employers 
replied  that  each  employer  would  meet  a 
committee  of  his  own  employees.  Separate 
31 


MEDIATION  AND  ARBITRATION 

meetings  between  employers  and  committees 
of  their  workers  were  then  held,  but  these 
were  fruitless. 

The  strike  dragged  along  for  nearly  three 
weeks.  The  employers  would  not  treat  with 
the  strike  leaders  nor  agree  to  concede  any 
increase  in  wages  or  reduction  in  hours  to 
the  strikers  as  such.  They  declared  that 
they  would  take  up  any  well  founded  griev- 
ance the  strikers  might  have  after  they  had 
returned  to  work,  but  were  firmly  resolved 
not  to  make  terms  with  them  as  a  body  or  to 
promise  them  anything  while  they  remained 
on  strike.  Finally  the  strike  leaders  told  the 
mediator  that  the  strikers  would  probably  re- 
turn to  work  if  they  were  assured  that  they 
would  be  given  a  fifty-two  hour  week,  a  re- 
reduction  of  two  hours,  and  an  increase  in 
piece  prices  sufficient  to  keep  their  weekly 
wages  the  same,  and  that  there  would  be  no 
discrimination  against  members  of  the  union. 
32 


MEDIATION 

The  mediator  then  made  a  public  statement 
that  he  believed  these  terms  would  be  granted 
if  the  strikers  returned  to  work  immediately. 
This  did  not  constitute  the  definite  assur- 
ance that  the  strikers  insisted  on  and  they  re- 
fused to  return.  The  Commissioner  of  La- 
bor then  ordered  an  investigation.  Two 
other  mediators  came  to  Rochester  to  make 
up  a  board  of  investigation  with  the  mediator 
already  on  the  ground  and  the  three  medi- 
ators received  a  promise  from  the  manufac- 
turers that  the  conditions  mentioned  above 
would  be  put  into  effect  in  their  factories  im- 
mediately. The  board  then  assured  the 
strikers  that  these  terms  would  be  granted 
and  faithfully  carried  out,  whereupon  the 
strikers  voted  to  accept  the  terms  and  re- 
turned to  work. 

On  May  1  of  the  same  year,  between  2,500 
and  3,000  employees  of  fifteen  department 
stores  in  Buffalo  went  out  on  strike.     These 
33 


MEDIATION  AND  ARBITRATION 

employees  had  not  previously  been  organized, 
and  the  strike  was  called  under  the  guidance 
of  local  Socialist  leaders,  who,  however, 
withdrew  very  early.  When  the  state  medi- 
ators intervened  they  found  that  some  of  the 
strikers  had  returned  to  work  but  a  large 
number  of  clerks  and  drivers  were  still  on 
strike  and  had  been  organized  as  local  unions 
of  the  national  unions  in  their  respective  oc- 
cupations. The  employers  refused  to  confer 
with  any  representatives  of  the  two  local 
unions  because  the  clerks  and  drivers  had 
gone  on  strike  without  giving  adequate  time 
for  negotiations  and  because  of  "the  unrea- 
sonableness of  their  demands."  The  clerks 
and  drivers  refused  to  return  to  work  unless 
concessions  were  made  to  them.  After  sev- 
eral days  the  mediators  succeeded  in  getting 
promises  from  the  employers  that  they  would 
make  certain  changes  in  hours,  wage  rates, 
and  other  conditions  of  employment,  if  the 
34 


MEDIATION 

strikers  would  return.  These  concessions 
were  then  made  known  by  the  mediators  to 
mass  meetings  of  the  clerks  and  drivers,  and 
the  strikers  voted  to  return  to  work. 

4.  The  service  of  the  mediators  has  not 
been  confined  to  getting  the  parties  to  do 
what  each  was  really  willing  to  do  and  would 
have  granted  directly  if  it  had  been  accus- 
tomed to  dealing  frankly  with  the  other  side. 
The  mediators  in  all  three  States  have  se- 
cured settlements  by  persuading  one  side  or 
both  to  concede  something  which  would  not 
otherwise  have  been  granted.  In  fact,  the 
most  successful  mediators  in  all  three  States 
have  seldom  given  up  a  case  in  which  their 
mediation  was  accepted,  without  as  a  last 
resort  recommending  terms  to  the  parties. 
Sometimes  concessions  have  been  made  in 
this  manner  because  the  side  which  was  will- 
ing to  concede  preferred  to  accept  the  recom- 
mendation of  the  mediator  rather  than  to 
35 


MEDIATION  AND  ARBITRATION 

grant  the  same  thing  directly  to  the  other 
party,  but  in  many  cases  the  recommenda- 
tions have  been  accepted  because  the  em- 
ployer or  the  men  did  not  wish  to  prolong  a 
strike  by  the  refusal  of  terms  which  an  out- 
sider of  the  experience,  reputation,  official 
position  and  personality  of  the  mediator  had 
decided  would  be  a  fair  settlement. 

In  May,  1913,  a  threatened  strike  of  ma- 
chinists employed  in  a  plant  in  Springfield 
was  averted  through  the  mediation  of  the 
Massachusetts  board  and  the  settlement  was 
effected  principally  through  the  acceptance 
by  the  company  of  a  suggestion  made  by  the 
board.  The  company  was  a  member  of  a  na- 
tional association  of  employers  which  is  op- 
posed to  recognizing  the  machinists'  union 
and  it  was  alleged  that  a  number  of  ma- 
chinists had  been  discharged  on  account  of 
their  activity  in  the  formation  of  a  local 
union  of  machinists.  An  officer  of  the  na- 
36 


MEDIATION 

tional  union  of  machinists  took  up  the  case, 
but  was  unable  to  secure  an  interview  with 
the  employer.  A  strike  was  then  decided 
upon. 

At  this  point  the  board  intervened.  The 
employer  informed  the  board  that  the  man- 
ager of  the  labor  bureau  of  the  employers' 
association  had  full  power  to  effect  a  settle- 
ment of  the  difficulty  and  that  all  negotia- 
tions must  be  with  him.  Upon  interviewing 
the  manager,  the  board  found  him  willing  to 
attend  a  conference  with  any  representative 
of  the  workers  whom  the  board  wished  to  in- 
vite. A  conference  was  then  held,  but  no 
agreement  was  reached.  The  board  then 
drew  up  a  notice  which  it  suggested  that  the 
employer  should  sign  and  post  in  his  factory. 
This  notice  stated  that  there  would  be  no  dis- 
crimination against  any  workman  "because 
of  any  affiliation,"  that  the  company  would 
rectify  discrimination  when  proved,  and  that 
37 


MEDIATION  AND  ARBITRATION 

the  company  would  "receive  a  committee 
representing  the  employees  of  any  one  de- 
partment for  the  purpose  of  a  friendly  dis- 
cussion of  any  real  or  fancied  grievance." 
After  consideration  this  was  agreed  to  by  the 
employer.  The  cases  of  certain  men  who 
had  been  discharged  were  then  taken  up  and 
disposed  of  and  the  proposed  strike  was 
called  off. 

5.  Sometimes  the  mediator's  recommenda- 
tion is  one  that  settles  the  particular  dispute 
to  the  satisfaction  of  both  parties,  not  merely 
a  recommendation  that  one  side  grant  some- 
thing to  the  other  that  it  is  reluctant  to  con- 
cede. Neither  party  is  asked  to  sacrifice  the 
point  it  believes  to  be  at  stake;  the  appar- 
ently conflicting  interests  are  harmonized. 
The  opportunity  to  render  this  kind  of  serv- 
ice is  naturally  greatest  in  disputes  between 
parties  who  have  not  been  dealing  with  each 
other  under  a  well  developed  system  of  col- 
38 


MEDIATION 

lective  bargaining.  The  parties  themselves 
are  not  able  to  find  a  solution  of  the  difficulty, 
and  there  appears  to  be  no  settlement  open 
which  does  not  involve  the  giving  up  by  one 
side  of  more  than  it  is  willing  to  give  up  with- 
out a  fight.  In  such  cases,  the  experienced 
mediator,  through  repeated  handling  of  simi- 
lar cases  and  an  understanding  of  what  each 
side  is  trying  to  secure,  may  be  able  to  find  a 
solution  that  safeguards  the  interests  of  both 
parties. 

The  Massachusetts  board  rendered  this 
type  of  service  in  a  discharge  case  in  Boston, 
in  February,  1913.  An  engineer  had  been 
discharged  under  circumstances  that  led  the 
engineer  and  his  union  to  contend  that  he  had 
been  dismissed  unjustly.  The  employer  re- 
fused to  reinstate  the  man  and  a  strike  was 
threatened.  The  board  suggested  that  the 
difficulty  be  met  by  the  company's  agreeing 
to  reinstate  the  man  on  the  understanding 
39 


MEDIATION  AND  ARBITRATION 

that  he  would  immediately  give  notice  of 
resignation.  The  employer  was  willing  to 
reinstate  him  provided  that  he  did  not  have 
to  continue  to  employ  him.  The  engineer, 
on  the  other  hand,  did  not  care  to  remain 
with  that  employer,  though  he  was  unwilling 
to  accept  the  stigma  of  discharge.  Thus 
both  parties  were  satisfied  with  the  terms  of 
settlement. 

Another  example  may  be  taken  from  the 
recent  history  of  the  Massachusetts  board. 
A  contracting  company  with  headquarters  in 
Boston  was  putting  up  a  building  in  another 
Massachusetts  city  and  had  subcontracted 
the  steam-fitting  work.  The  Boston  com- 
pany had  not  stipulated  that  the  subcontrac- 
tor should  employ  only  union  men  and  the 
subcontractor  had  employed  some  non- 
unionists.  A  strike  was  called  against  the 
subcontractor,  which  soon  included  the  em- 
ployees of  the  company  in  other  trades  on 
40 


MEDIATION 

that  building  and  threatened  to  spread  to  its 
building  work  in  other  cities.  The  contract- 
ing company  was  quite  willing  that  the  sub- 
contractor should  employ  union  steam-fitters 
only,  but  under  its  contract  it  was  unable  to 
force  him  to  discharge  the  non-union  men, 
nor  could  it  take  away  the  work  from  him 
without  rendering  itself  liable  for  damages 
for  breach  of  contract.  The  board  sug- 
gested that  on  promise  from  the  company  to 
require  in  all  its  later  contracts  with  sub- 
contractors that  only  union  men  should  be 
employed,  the  company's  work  on  that  par- 
ticular building  should.be  allowed  to  go  for- 
ward. This  compromise  was  accepted  by 
both  sides. 

6.  Finally,  the  mediators  should  be  able  to 
suggest  settlements  which  do  not  merely  dis- 
pose of  individual  cases  but  permanently 
compose  the  hitherto  apparently  conflicting 
interests  involved  in  an  important  issue. 
41 


MEDIATION  AND  ARBITRATION 

This  is  the  highest  type  of  service  which  the 
mediator  performs.  There  is  much  opposi- 
tion to  mediation  on  the  ground  that  media- 
tion means  a  mere  compromise  for  the  par- 
ticular case,  that  it  results  merely  in  the 
patching  up  of  one  break  without  removing 
the  difficulty  which  caused  it  and  which  will 
undoubtedly  cause  others  like  it.  This  view 
often  leads  one  or  both  sides  to  prefer  to  fight 
the  issue  out  in  the  hope  of  establishing  com- 
pletely their  own  positions  and  so  disposing 
of  that  question  for  some  time  to  come.  The 
mediator  is  doing  constructive  service  of  the 
highest  kind  when  he  finds  for  the  parties  a 
way  out  which  is  not  merely  a  compromise, 
but  a  real  solution  of  the  problem,  one,  for 
example,  which  safeguards  the  workman 
from  industrial  tyranny  or  preserves  his 
vested  interest  in  the  trade  and  at  the  same 
time  leaves  the  employer  free  to  safeguard 
himself  against  incompetent  workers  and  to 
42 


MEDIATION 

improve  in  legitimate  ways  the  processes  of 
production. 

The  securing  of  settlements  of  this  type 
has  not  been  frequently  achieved  in  the  past 
by  state  mediators.  The  example  of  service 
of  this  kind  which  comes  most  readily  to  mind 
is  the  work  of  Mr.  Louis  D.  Brandeis  in  set- 
tling the  long  strike  in  the  cloak,  suit  and 
skirt  industry  in  New  York  City  in  1910. 
The  issue  on  which  the  parties  split  and  which 
stood  apparently  hopelessly  in  the  way  of  a 
settlement  was  the  insistence  of  the  unions  on 
the  closed  shop  and  of  the  employers  on  free- 
dom to  employ  whom  they  chose.  Mr. 
Brandeis  brought  them  to  agreement  finally 
on  the  basis  of  the  "preferential  union  shop." 

The  chance  to  render  service  of  this  kind 
will  not  often  present  itself  in  differences  be- 
tween parties  who  have  been  working  to- 
gether under  well  developed  systems  of  col- 
lective bargaining.  It  may,  however,  occur 
43 


MEDIATION  AND  ARBITRATION 

even  there  from  time  to  time.  It  is  only 
rarely  that  the  employers  and  the  men  in  one 
trade  are  familiar  with  the  devices  used  in 
other  trades  in  handling  the  same  trouble- 
some questions,  as,  for  example,  that  of  dis- 
charges. A  mediator  who  is  thoroughly  ac- 
quainted with  the  devices  successfully  em- 
ployed in  the  various  trades  in  handling  the 
particular  issue  involved  in  a  serious  dispute, 
and  who  has  faced  the  same  problem  re- 
peatedly in  other  cases,  should  be  of  great 
assistance  to  parties  who  are  seeking  a  real 
solution  of  their  difficulty.  The  possibility 
of  rendering  this  high  type  of  constructive 
service  is  real,  and  it  furnishes  one  of  the  best 
reasons  for  the  State's  attempting  to  put  at 
the  disposal  of  the  industrial  public  the  serv- 
ices of  high-class  experienced  mediators. 

LIMITATIONS  OF  MEDIATION 

On  the  other  hand,  too  much  must  not  be 
expected  of  mediation.    It  cannot  be  ex- 
44 


MEDIATION 

pected  that  the  mediators  shall  always  pre- 
vent the  occurrence  of  strikes  or  lockouts  or 
that  they  shall  bring  all  stoppages  to  a 
speedy  termination.  The  experience  of  the 
mediators  in  the  States  studied  indicates  that 
there  are  several  classes  of  disputes  in  which 
mediation  is  likely  to  be  of  little  effect. 

Successful  mediation  requires  that  the  em- 
ployer shall  deal  with  the  representatives  of 
the  workers  in  the  presence  of  or  through  the 
mediator,  and  if  an  employer  is  resolved  not 
to  deal  with  his  workers  as  a  body,  either  di- 
rectly or  indirectly,  he  will  not  accept  media- 
tion. If  the  employer  is  a  member  of  an  as- 
sociation which  will  support  him  in  his  re- 
fusal to  treat  with  his  workmen  as  a  body,  the 
possibility  of  successful  mediation  is  even 
smaller.  In  these  cases  there  is  no  chance 
for  successful  mediation  until  the  strike  has 
lasted  so  long  that  the  employer  is  driven  to 
accept  a  settlement  with  the  strikers  as  a 
45 


MEDIATION  AND  ARBITRATION 

body.  In  such  circumstances  a  settlement 
frequently  can  be  secured  by  mediation 
earlier  than  it  would  be  sought  or  accepted 
by  direct  negotiation.  But  if  the  workmen 
are  unable  to  hold  out  so  long  there  is  little 
chance  that  mediation  will  be  effective. 

It  could  hardly  have  been  expected,  for 
example,  that  the  mediation  of  the  Massa- 
chusetts board  would  be  successful  at  the 
outbreak  of  the  Lawrence  textile  strike  in 
1912.  The  representatives  of  the  employers 
on  the  ground  were  not  accustomed  to  col- 
lective bargaining ;  they  were  not  accustomed 
to  acting  together;  and  they  were  unable  or 
unwilling  to  proceed  on  their  own  initiative, 
without  orders  from  those  who  controlled  the 
companies  financially.  Moreover,  the  real 
strike  leaders  were  officials  of  the  Industrial 
Workers  of  the  World  whom  the  employers' 
agents  looked  upon  as  revolutionists  and 
were  determined  not  to  deal  with  or  to  recog- 

46 


MEDIATION 

nize  in  any  way,  directly  or  indirectly.  The 
strike  had  to  go  on  until  the  employers  were 
willing  to  deal  with  the  strikers  as  a  body  and 
the  latter  were  willing  to  return  on  terms 
that  the  employers  could  afford  to  grant. 

For  much  the  same  reasons,  the  New  York 
bureau  found  it  impossible  to  bring  about  a 
settlement  of  a  lockout  of  steel  workers  in 
Syracuse,  N.  Y.,  in  May,  1913.  The  em- 
ployers closed  the  mill  because  a  labor  or- 
ganization had  been  formed  among  the  em- 
ployees, and  posted  a  notice  announcing  that 
the  mill  would  remain  closed  until  it  could  be 
run  by  men  who  would  signify  their  loyalty 
to  the  company  by  sending  in  their  signa- 
tures individually.  The  company  also  in- 
sisted that  the  men  should  give  up  their  union 
membership  before  it  would  employ  them. 
The  men,  on  the  other  hand,  refused  to  give 
up  their  union  membership  or  to  go  back 
except  in  a  body,  though  they  did  not  insist 
47 


MEDIATION  AND  ARBITRATION 

on  recognition  of  their  union.  Both  sides 
understood  the  issue  and  neither  would  com- 
promise. Therefore  the  bureau  was  unable 
to  effect  a  settlement. 

The  chief  mediator  of  Ohio  recently  en- 
countered a  similar  situation.  The  Flint 
Glass  Workers'  Union,  in  an  attempt  to 
unionize  a  glass  factory  in  Columbus,  had 
declared  a  strike.  The  employer  refused  to 
recognize  the  national  union,  declaring  that 
he  would  close  the  factory  before  he  would 
settle  with  the  union.  The  union,  which  has 
a  national  wage  scale  made  in  agreement  with 
a  national  association  of  glass  manufac- 
turers, insisted  that  the  only  logical  basis  of 
settlement  was  the  agreement  of  the  manu- 
facturer to  pay  the  same  wages  and  grant 
the  same  conditions  as  are  agreed  to  by  the 
association.  Neither  side  was  willing  to 
compromise  and  the  mediator  could  do  noth- 
ing to  bring  about  a  settlement. 
48 


MEDIATION 

In  another  class  of  cases  mediation  is  not 
likely  to  be  successful  because  there  is  little 
need  for  the  kind  of  help  that  the  mediator 
brings  to  the  situation.  In  this  class  of  cases 
the  parties  are  accustomed  to  dealing  with 
each  other  in  joint  conferences  and  the  strike 
or  lockout  is  resorted  to  only  after  a  lengthy 
period  of  conferences.  Each  side  knows  the 
other's  position,  but  is  determined  not  to  ac* 
cept  it,  at  least  not  without  a  fight.  Either 
can  secure  a  conference  at  any  time  after  the 
strike  or  lockout  has  been  inaugurated,  if  it 
has  any  further  proposal  to  make,  and  so  does 
not  need  the  services  of  the  mediator  for 
that  purpose.  If  both  are  thus  determined 
to  fight  it  out  to  a  finish  there  is  little  chance 
for  a  mediator  to  avert  or  cut  short  the  strug- 
gle unless  he  can  find  a  solution  acceptable 
to  both  parties,  and  for  some  issues  that 
is  extremely  difficult.  If  he  is  unable  to 
find  such  a  solution,  he  cannot  hope  to  do 
49 


MEDIATION  AND  ARBITRATION 

more  than  bring  the  two  sides  into  confer- 
ence when  one  is  so  crippled  as  to  be  ready 
to  concede  something  but  not  willing  to  ask 
for  terms,  and  thus  secure  a  settlement 
slightly  earlier  than  would  have  been  pos- 
sible without  mediation. 

CHARACTERISTICS  OF  A  SUCCESSFUL  SYSTEM 

A  plan  embracing  the  constitution  and 
powers  of  a  state  agency  of  mediation  is 
here  outlined  with  respect  to  the  officers  who 
should  mediate,  the  considerations  which 
should  govern  their  appointment,  and  the  de- 
gree of  discretion  which  should  be  left  them 
as  to  whether  and  when  to  offer  their  services. 

The  Officers. — Mediation  should  be  in- 
trusted to  a  person  or  set  of  persons  entirely 
distinct  from  those  who  are  designated  to  act 
as  arbitrators  or  to  conduct  public  investiga- 
tions. The  function  of  the  mediator  cannot 
be  most  successfully  discharged  when  there  is 

50 


MEDIATION 

a  possibility  that  the  mediator  may  be  forced 
later  to  pass  judgment  on  the  contentions  of 
the  parties.1  The  plan  of  having  a  chief 
mediator  and  assistants  appears  to  be  better 
than  that  of  having  a  board  of  three  col- 
leagues of  equal  rank.  The  nature  of  the 
work  of  mediation  is  such  that,  other  things 
being  equal,  better  results  can  usually  be  se- 
cured through  one  man,  availing  himself,  if 
necessary,  of  the  assistance  of  another  man 
or  two  other  men,  but  following  his  own 
judgment  and  giving  a  unity  to  the  sug- 
gestions and  recommendations  made  to  the 
parties. 

Obviously,  it  is  much  easier  to  secure  one 
man  with  the  proper  personal  qualifications 
for  the  work  of  mediation  than  to  secure 
three.  Moreover,  a  greater  continuity  of 
policy  is  possible  under  the  chief  mediator 
plan,  and  reputation  gained  through  past 

1  See  pp.  78,  94-95. 

51 


MEDIATION  AND  ARBITRATION 

services  is  more  valuable  when  associated 
with  the  name  of  an  individual  than  with  that 
of  a  board  or  bureau.  Finally,  one  man  act- 
ing with  individual  responsibility  in  all  cases 
will  accumulate  more  valuable  experience 
and  a  more  intimate  acquaintance  with  men, 
with  the  industries,  and  with  the  issues  that 
arise,  than  he  would  if  acting  as  a  member  of 
a  board.  These  are  the  qualifications,  other 
than  personality,  which  make  for  success  in 
mediation,  and  that  plan  should  be  adopted 
which  aids  most  in  the  development  of  them. 
Appointment  of  the  Mediators. — It  is 
hardly  necessary  to  insist  that  the  creation  of 
an  agency  of  mediation  will  not  secure  the 
desired  results  unless  the  mediators  com- 
mand the  confidence  of  the  employers  and 
workers  in  their  ability  and  impartiality.  If 
this  is  to  be  gained  everything  which  causes 
the  industrial  public  to  mistrust  the  purposes 
for  which  the  mediation  office  is  conducted  or 
52 


MEDIATION 

the  motives  which  govern  the  selection  of  the 
mediators  must  be  avoided.  It  is,  therefore, 
very  important  that  the  offices  of  chief  medi- 
ator and  assistant  mediator  should  be  placed 
above  the  belief  that  these  offices  are  being 
used  as  a  reward  for  party  services,  expected 
or  past,  or  disposed  of  so  as  to  "strengthen" 
a  particular  political  party  in  any  way  other 
than  through  the  faithful  and  capable  per- 
formance of  their  duties  by  the  incumbents. 
One  of  the  chief  obstacles  to  the  usefulness 
of  state  agencies  of  mediation  and  arbitra- 
tion in  the  past  has  been  the  belief  of  a  large 
number  of  persons,  workmen  as  well  as  em- 
ployers, to  whom  their  services  have  been  of- 
fered, that  the  positions  of  the  members  of 
the  boards  or  bureaus  were  "party  jobs"  and 
that  the  members  were  trying  to  justify  in 
some  way  the  existence  of  their  sinecures  or 
attempting  to  secure  a  settlement  which 
would  redound  to  the  advantage  of  their  re- 
53 


MEDIATION  AND  ARBITRATION 

spective  political  parties.  It  is  very  difficult 
even  for  mediators  of  proved  ability,  fairness, 
and  tact  to  realize  the  full  possibilities  of 
usefulness  while  the  impression  now  prevail- 
ing in  many  quarters  as  to  the  grounds  of 
their  selection  and  the  motives  which  guide 
them  in  their  intervention  remains.  Fur- 
thermore, if  any  employer  or  group  of 
workers  refuses  to  allow  the  state  mediator 
or  mediators  to  intervene  in  a  dispute,  it 
should  not  be  possible  that  a  real  or  alleged 
disregard  for  the  mediator  or  mediators  as 
mere  party  spoilsmen  should  be  accepted  by 
any  considerable  body  of  citizens  as  a  full  or 
even  partial  defense  of  the  refusal. 

The  chief  mediator  should  not  only  be  free 
from  reasonable  suspicion  that  he  is  a  party 
spoilsman,  but  should  also  have  the  confi- 
dence of  the  employers  and  workers  of  the 
State  as  to  his  knowledge  and  fairness  in 
dealing  with  industrial  relations.  The 
54 


MEDIATION 

standing  of  the  office  can  not  be  guaranteed 
in  these  respects  by  any  mechanical  plan  of 
selection,  but  it  seems  wise  to  place  the  selec- 
tion of  the  chief  mediator  in  the  hands  of  a 
board  which  deals  with  industrial  relations 
and  which  represents  within  its  membership 
the  interests  of  the  employers  and  the 
workers  of  the  State  as  such,  but  is  intended 
as  a  board  to  be  partial  to  neither.  The  in- 
dustrial commissions  which  have  recently 
been  created  in  several  of  the  states  are  in- 
tended to  be  boards  of  this  character  and  in  a 
State  in  which  such  a  board  exists  it  should 
nominate  the  chief  mediator.  The  selection 
of  the  chief  mediator  by  a  board  of  this  kind 
would  probably  secure  for  this  officer  a  bet- 
ter standing  with  the  employers  and  em- 
ployees of  the  State  than  direct  appointment 
by  the  governor  without  such  nomination. 
Once  appointed,  the  chief  mediator  should  be 
regarded  as  the  head  of  an  independent  de- 
55 


MEDIATION  AND  ARBITRATION 

partment  of  the  State  Government  and  not 
made  responsible  to  any  commission  or  other 
department.  His  term  of  office  should  be  of 
sufficient  length  to  give  him  independence. 

New  York  has  furnished  an  example,  for 
a  number  of  years,  of  a  bureau  of  mediation 
working  under  unfavorable  conditions  sur- 
rounding the  appointment  of  its  members. 
Until  the  creation  of  the  Industrial  Com- 
mission in  1915,  the  chief  mediator  and  his 
assistants  were  appointed  by  the  Commis- 
sioner of  Labor  and  for  a  number  of  years 
that  office  was  held  by  men  who  had  previ- 
ously been  trade  union  officers.  The  last 
Commissioner  of  Labor  to  serve  was  an  ex- 
president  of  a  national  union.  Moreover, 
the  four  assistant  mediators,  all  of  whom  have 
been  in  office  for  several  years,  are  men  who 
have  at  one  time  or  another  been  connected 
with  labor  organizations. 

In  many  cases  neither  the  previous  union 
56 


MEDIATION 

affiliation  of  the  assistant  mediators  nor  the 
fact  that  the  chief  mediator  held  his  office 
through  appointment  by  an  ex-president  of  a 
labor  union  made  them  any  the  less  accept- 
able to  the  employers,  but  in  many  other 
cases  it  did.  A  number  of  employers  stated 
in  interviews  that  they  assumed  that  the 
mediators  merely  aimed  to  secure  from  the 
employer  the  most  favorable  possible  terms 
for  the  men.  An  employer  who  holds  this 
opinion  is  not  likely  to  give  the  mediator  his 
full  confidence  or  to  accept  his  suggestions. 
On  the  other  hand,  many  employers  stated 
that  they  found  the  mediators  very  fair. 
For  example,  one  of  the  mediators  who  was 
formerly  an  officer  of  a  labor  organization 
has  acted  a  number  of  times  as  the  third  man 
in  boot  and  shoe  price  arbitrations  in  Brook- 
lyn. The  first  time  he  served  at  the  request 
of  the  employers,  with  the  acquiescence  of 
the  men,  and  since  then  he  has  been  called 
57 


MEDIATION  AND  ARBITRATION 

on  as  a  matter  of  course  by  both  parties. 

The  point  urged  here  is  that  previous 
trade  union  affiliation  does  not  necessarily 
disqualify  a  man  as  mediator.  Many  former 
trade  union  leaders  have  made  first-class 
mediators  in  those  cases  in  which  their  serv- 
ices were  accepted  in  good  faith  by  both 
parties,  and  they  have,  in  fact,  made  them- 
selves acceptable  to  many  employers.  But 
in  many  cases  the  trade  unionist  is  handi- 
capped. It  is  easy  to  see  that  he  would  prob- 
ably be  much  less  acceptable  to  an  employer 
or  association  of  employers  opposed  to  deal- 
ing with  labor  unions  than  a  mediator  who 
had  no  union  affiliations.  The  same  objec- 
tion lies  also  against  a  mediator  who  has  not 
been  a  unionist,  if  he  holds  office  at  the  pleas- 
ure of  a  chief  who  has  been  a  prominent 
union  officer. 

An  illustration  is  found  also  in  the  his- 
tory of  the  Ohio  board.     There  was  always 

58 


MEDIATION 

one  trade  union  member  on  the  board  and  for 
many  years  a  well-known  ex-president  of  a 
national  union  served  as  the  representative 
of  the  workers.  This  man  was  personally 
well  qualified  to  act  in  most  cases,  but  he 
found  that  his  former  trade  union  connec- 
tion prejudiced  many  employers  against  him. 
Entirely  aside  from  their  belief  that  he  must 
favor  union  recognition,  they  were  reluctant 
to  deal  with  him  because  they  felt  that  in  re- 
ceiving him  they  would  be  recognizing  trade 
unionism,  inasmuch  as  he  was  admittedly  the 
representative  of  organized  labor  on  the 
board.  Disputes  involving  the  refusal  of 
employers  to  recognize  unions  have  not  been 
unimportant  in  Ohio.  In  its  1912  report  the 
board  gave  as  one  of  the  chief  causes  of 
strikes  and  lockouts  "the  refusal  of  certain 
employers  to  recognize  labor  unions  or  deal 
with  the  officers,  committees,  or  other  author- 
ized representatives  of  their  workmen  in  the 
59 


MEDIATION  AND  ARBITRATION 

adjustment  of  differences."  As  the  ex- 
president  of  a  national  union  was  the  only 
salaried  member  of  the  board  and  conse- 
quently the  one  who  naturally  first  attempted 
to  get  in  touch  with  the  parties,  the  opposi- 
tion of  so  many  of  the  employers  to  receiv- 
ing him  in  good  faith  made  it  much  more  dif- 
ficult for  the  board  to  get  good  results. 

Similarly,  a  man  who  had  been  a  non- 
union employer  or  the  representative  of  a 
non-union  employer  or  of  an  "open  shop" 
organization  would  be  unacceptable  to  a 
union  as  a  mediator.  It  would  probably  be 
even  more  fatal  to  choose  such  a  man  than  to 
choose  a  trade  unionist.  The  undesirability 
of  choosing  the  chief  mediator  from  the  trade 
union  ranks  is  emphasized  at  greater  length 
merely  because  union  men  are  actually  chosen 
much  more  frequently  as  state  mediators 
than  are  representatives  of  non-union  or 
open  shop  employers. 
60 


MEDIATION 

The  chief  mediator  should  be  allowed  to 
nominate  his  assistants,  if  assistants  are 
needed.  If,  as  is  assumed,  he  has  had  no 
previous  trade  union  affiliations,  he  will  find 
it  helpful  to  have  one  assistant  who  has  been 
a  member  of  a  labor  organization  and  has  in- 
timate knowledge  of  the  viewpoint  and  poli- 
cies of  labor  organizations.  On  the  other 
hand,  he  should  also  have  the  opportunity  of 
securing  the  assistance  of  a  man  who  has  been 
an  employer,  or  a  manager  or  superintend- 
ent, and  has  thus  had  experience  in  employ- 
ing and  dealing  with  men.  Until  such  time 
as  the  chief  mediator  gains  the  full  confi- 
dence of  the  parties  to  controversies  he  will 
find  these  men  of  great  assistance  in  opening 
the  way  for  the  acceptance  of  his  services. 
Even  after  the  mediator  has  won  the  general 
confidence  of  the  industrial  public,  cases  will 
arise  in  which  unduly  suspicious  or  obstinate 
parties  can  more  successfully  be  brought  to 
61 


MEDIATION  AND  ARBITRATION 

deal  with  the  other  party  by  an  official  who 
it  is  thought  understands  their  case.  The 
assistant  mediators  can  be  used  also  to  make 
the  preliminary  inquiries  in  disputes,  and  the 
less  serious  or  less  difficult  of  these  they  will 
probably  be  able  to  settle  without  calling  in 
the  chief  mediator.  This  plan  has  been  tried 
in  Ohio  by  the  chief  mediator  and  works  very 
well. 

Powers  of  Mediation. — It  is  important 
that  the  mediators  should  be  empowered  to 
offer  their  services  before  a  strike  or  lockout 
actually  occurs,  if  in  the  judgment  of  the 
chief  mediator  a  stoppage  is  imminent. 
Provision  should  be  made  that  either  party 
may  request  intervention  before  a  strike  or 
lockout.  Both  the  Massachusetts  and  the 
New  York  laws  put  cases  in  which  a  strike 
or  lockout  "is  seriously  threatened"  on  an 
equality,  in  this  respect,  with  those  in  which 
a  strike  or  lockout  has  actually  occurred. 
62 


MEDIATION 

The  same  is  true  of  the  old  Ohio  law,  and 
under  the  present  Ohio  law  the  chief  media- 
tor in  the  exercise  of  his  discretion  has 
intervened  in  such  cases.  In  all  three  States 
the  mediators  are  unanimous  in  the  opinion 
that  many  disputes  which  result  in  strikes  or 
lockouts  could  be  amicably  adjusted  if  the 
mediators  had  knowledge  of  the  trouble  be- 
fore the  strike  or  lockout  occurs.  In  all 
three  States,  also,  the  mediators  follow  their 
own  judgment  as  to  whether  a  strike  or  lock- 
out is  really  seriously  threatened  when  in- 
formed that  such  is  the  case.  That  discre- 
tion should  be  left  them. 

If  mediation  has  not  been  requested  by  one 
or  both  of  the  parties,  the  mediators  should 
be  allowed  to  use  their  discretion  as  to 
whether  mediation  should  be  offered,  and  if 
so,  at  what  time,  even  in  cases  in  which  strikes 
or  lockouts  have  actually  occurred.  It  is  not 
desirable  that  mediation  should  be  offered  in 
63 


mediation;  and  arbitration 

all  cases  immediately  upon  the  occurrence  of 
the  strike  or  lockout.  A  number  of  strikes 
can  be  and  are  settled  by  the  parties  involved 
after  a  few  days'  cessation  of  work,  without 
any  serious  inconvenience  to  the  public  from 
the  stoppage.  It  is  not  desirable  that  the 
state  mediators  should  intervene  in  such 
cases.  On  the  other  hand,  in  another  large 
class  of  cases  attempted  mediation  is  almost 
certain  to  be  fruitless  in  the  first  week  or  ten 
days  of  the  strike  or  lockout.  Sometimes, 
when  the  strikers  are  but  newly  organized, 
the  union  leaders  wish  to  keep  them  out  for 
several  days  at  least,  in  order  to  further  the 
work  of  organization  and  to  test  their  union- 
ism under  fire.  In  other  cases,  each  side 
knows  the  other's  position  and  each  is  deter- 
mined not  to  yield  while  it  sees  a  good  chance 
for  a  complete  victory.  Unless  a  public 
utility  is  involved  it  would  seem  better  to 
withhold  the  proffer  of  mediation  until  the 

64 


MEDIATION 

parties  are  in  a  mood  to  cooperate  in  the  at- 
tempt to  secure  an  adjustment;  nothing  is  to 
be  gained  for  the  principle  of  mediation  by 
prematurely  urging  mediation  upon  parties 
who  are  determined  not  to  settle  at  that  time. 
It  seems  better,  therefore,  not  to  impose  the 
obligation  of  immediate  intervention  in  all 
cases  coming  to  the  knowledge  of  the  medi- 
ators. The  mediators  should  be  required  to 
offer  their  services  as  soon  as  may  be  prac- 
ticable in  all  cases  in  which  their  intervention 
is  requested  by  one  or  both  parties ;  and  em- 
powered to  intervene  in  other  cases  at  the  dis- 
cretion of  the  chief  mediator. 


II 

INVESTIGATION 

The  treatment  of  public  investigation  and 
public  recommendation  as  a  means  of  termi- 
nating labor  disputes  in  which  mediation  has 
failed  must,  as  in  the  case  of  arbitration,  be 
confined  practically  to  Massachusetts  and 
New  York.  The  present  Ohio  law,  adopted 
in  1913,  makes  no  specific  provision  for  in- 
vestigation, and  the  powers  conferred  upon 
the  Board  of  Arbitration  and  Conciliation  by 
the  old  law,  of  making  an  inquiry  and  pub- 
lishing a  decision  on  the  merits  of  every  dis- 
pute which  it  was  unable  to  bring  to  a  con- 
clusion, were  practically  not  exercised  by 
the  board.  The  Massachusetts  and  New 
York  laws  have  produced  a  number  of  public 
investigations  and  subsequent  recommenda- 
66 


INVESTIGATION 

tions  which  have  led  to  settlements,  and  these 
results  indicate  that  much  can  be  accom- 
plished by  investigation  and  recommendation 
if  these  are  made  by  boards  in  which  the 
parties  and  the  public  have  confidence.  The 
experience  of  New  York  and  Massachusetts 
in  this  field  under  their  existing  laws,  when 
compared  with  the  results  obtained  in  Canada 
under  the  Industrial  Disputes  Act  and 
with  the  results  obtained  by  private  con- 
ciliation boards,  leads  to  the  conclusion  that 
the  work  of  investigation  and,  if  necessary, 
recommendation  can  most  successfully  be 
performed  by  a  special  board  created  for 
that  purpose  in  each  case.  A  plan  for  the 
constitution  of  special  boards  along  these 
lines  is  therefore  suggested. 

THE  EXISTING  LAW 

The  Massachusetts  law  imposes  upon  the 
State  Board  of  Conciliation  and  Arbitration 
67 


MEDIATION  AND  ARBITRATION 

the  obligation  of  investigation  in  every  case 
in  which  the  mediation  of  the  board  is  not  fol- 
lowed by  a  settlement,  for  the  purpose  of  as- 
certaining the  cause  of  the  strike  or  lockout 
and  of  placing  the  responsibility  or  blame 
for  its  existence  or  continuance.  Since  1914 
the  board  has  also  been  required  by  law  to 
"make  and  publish  a  report  finding  such 
cause  and  assigning  such  responsibility  of 
blame,"  "unless  a  settlement  of  the  contro- 
versy is  reached."  Prior  to  1914  the  mak- 
ing and  publication  of  a  report  stating  the 
cause  and  assigning  blame  was  optional  with 
the  board,  though  the  board  was  under  obli- 
gation to  conduct  an  investigation  in  all  such 
cases. 

In  New  York  a  "board  of  mediation  and 
arbitration"  investigates  in  cases  in  which  the 
mediators  are  unable  to  secure  a  settlement, 
if  ordered  to  do  so  by  the  Industrial  Com- 
mission.1    For  these  investigations  the  board 

68 


INVESTIGATION 

is  made  up  of  the  chief  mediator  and  two 
other  officers  of  the  department,  designated 
by  the  commission ;  *  as  a  matter  of  practice 
two  of  the  assistant  mediators  are  chosen  for 
this  duty.  In  both  Massachusetts  and  New 
York  the  board,  when  conducting  an  investi- 
gation, has  power  to  compel  the  appearance 
of  witnesses,  to  require  testimony  under 
oath,  etc. 

RESULTS 

In  neither  Massachusetts  nor  New  York 
has  the  power  of  conducting  public  investi- 
gations been  widely  used.  The  great  bulk 
of  the  cases  in  which  mediation  fails  to  secure 
a  settlement  have  been  allowed  to  pass  with- 
out such  formal  investigation  and  report. 
This  is  because  the  mediators  believe  that  in 
these  cases  no  useful  purpose  would  be  served 
by  a  formal  investigation.     The  members  of 


1  Until   May   22,    1915,  by   the   Commissioner   of 
Labor. 

69 


MEDIATION  AND  ARBITRATION 

the  board  have  been  averse  to  holding  up  one 
side  to  public  disapproval,  particularly  after 
the  issue  has  been  virtually  decided.  They 
have  felt  that  unless  an  investigation  would 
lead  to  an  agreement  it  would  be  bad 
policy  for  a  board  primarily  constituted  for 
mediation  to  hold  a  public  investigation 
which  could  serve  only  the  purpose  of  find- 
ing one  side  or  both  blameworthy.  The 
same  considerations  led  the  old  Ohio  board 
to  refrain  from  using  its  powers  of  public  in- 
vestigation and  recommendation.  There- 
fore, until  very  recently  the  policy  in  both 
Massachusetts  and  New  York  has  been  to 
conduct  no  further  investigation  than  that 
necessarily  involved  in  mediation,  save  in 
very  exceptional  cases. 

In  the  past  few  years  the  Massachusetts 
board  has  been  much  more  active  in  holding 
formal  investigations  with  public  hearings, 
in  cases  in  which  mediation  has  failed.    It 

70 


INVESTIGATION 

was  in  line  with  this  stiffening  of  policy  that 
the  law  was  changed  in  1914  so  as  to  make  the 
publication  of  a  report,  as  well  as  an  inves- 
tigation in  such  cases,  compulsory.  Even 
now,  however,  the  board  does  not  conduct 
public  investigations  and  give  its  reports 
wide  publicity  in  all  cases  in  which  mediation 
fails  to  result  in  a  settlement.  If  the  board's 
more  or  less  informal  investigation  and  direct 
suggestions  to  the  parties  result  in  a  settle- 
ment no  further  publicity  is  given  the  find- 
ings as  to  cause  or  blame.  For  the  past 
several  years  it  has  been  the  policy  of  the 
board  to  make  a  "recommendation"  to  the 
parties  after  the  investigation  as  to  what 
should  be  done  to  settle  the  dispute,  although 
it  is  not  required  by  the  law  to  do  so.  To 
frame  such  constructive  recommendations, 
rather  than  to  assign  blame,  has  usually  been 
its  purpose  in  conducting  its  investigations, 
and  in  most  of  these  cases  the  recommenda- 
71 


MEDIATION  AND  ARBITRATION 

tions  of  the  board  have  been  accepted  by  the 
parties  as  the  basis  of  a  settlement. 

The  value  of  a  public  investigation  and  the 
publication  of  its  findings  by  the  board  in  an 
important  strike  was  illustrated  in  the  Bos- 
ton street  car  strike  of  1912.  This  strike 
followed  the  discharge  of  a  number  of  men 
apparently  for  joining  a  newly  formed  union 
or  for  aiding  in  its  organization.  The  com- 
pany replaced  a  large  proportion  of  the  men 
by  strike-breakers  and  attempted  to  main- 
tain its  service.  It  took  the  ground  that  it 
had  filled  the  places  of  the  men  who  had  left 
and  was  operating  its  cars  satisfactorily  and 
that  there  was  no  strike  on  its  lines.  It  re- 
fused, therefore,  to  confer  with  representa- 
tives of  the  strikers.  The  board  communi- 
cated with  the  parties  several  times,  but  the 
company  refused  to  confer  with  the  strikers. 
The  workers  were  willing  to  arbitrate  but 
the  company  was  not.     About  three  weeks 

72 


INVESTIGATION 

after  the  strike  was  inaugurated  the  strikers 
requested  the  board  to  hold  an  investigation. 

The  board  held  a  series  of  hearings  and 
about  six  weeks  after  the  strike  began  made 
a  report.  In  its  report  the  board  stated  that 
the  men  were  justified  in  believing  that  many 
of  the  employees  had  been  discharged  for 
joining  the  union  or  for  activity  in  its  forma- 
tion, and  that  "many  of  the  company's  cars 
are  being  operated  by  men  whose  conduct 
does  not  meet  the  approval  of  the  traveling 
public."  It  added  a  recommendation  that 
the  parties  attempt  by  conference  to  arrive 
at  an  amicable  settlement.  About  a  week 
later  an  agreement  was  reached  by  the  com- 
pany and  the  representatives  of  the  union,  in 
which  it  was  provided  that  certain  matters 
with  reference  to  which  the  parties  were  un- 
able to  agree  should  be  left  to  the  board  for 
final  decision. 

In  1913  the  board  in  at  least  two  cases  sent 
73 


MEDIATION  AND  ARBITRATION 

a  recommendation  to  the  strikers,  after  con- 
ducting1 an  investigation,  to  call  the  strike  off. 
In  both  cases  the  strikers  were  for  the  most 
part  immigrants  who  did  not  speak  English 
and  had  left  their  work  without  first  formu- 
lating and  presenting  their  grievances.  In 
neither  case  did  they  have  an  organization  be- 
fore the  strike,  and  both  strikes  were  con- 
ducted by  leaders  who  represented  the  In- 
dustrial Workers  of  the  World.  The 
employer  refused  in  both  cases  to  deal  with 
the  strike  leaders.  The  board's  recommen- 
dation was  made  in  both  cases  in  the  form  of 
a  letter  to  the  strikers.  In  one  case  the 
strikers  returned  to  work  at  once;  in  the 
other  the  strike  collapsed  about  a  week  after 
the  board  made  its  recommendation. 

Where  the  issue  is  more  specifically  one  of 
fact,  an  investigation  is  very  likely  to  lead 
to  a  recommendation  which  both  sides  will 
accept.     Two  of  the  cases  on  which  the 

74 


INVESTIGATION 

board  made  specific  reports  in  1914  were  dis- 
putes over  discharges.  In  one  case,  involv- 
ing milk-wagon  drivers  for  a  Boston  com- 
pany, the  decision  was  adverse  to  the  strikers. 
In  the  other,  the  board  recommended  that 
striking  laundry  workers  in  Brockton  and 
their  employer  submit  the  discharges  in  con- 
troversy to  arbitration.  In  both  cases  the 
recommendations  were  accepted.  In  wage 
disputes,  too,  an  investigation  is  likely  to 
lead  to  a  settlement  by  bringing  out  how  the 
wages  paid  compare  with  wages  paid  else- 
where for  similar  work  or  how  wages  have 
advanced  as  compared  with  the  cost  of  living. 
If  made  upon  application  from  both  par- 
ties, a  report  on  the  facts  found,  which  does 
not  deal  with  the  cause  of  the  strike  nor  at- 
tempt to  place  responsibility,  may  have  prac- 
tically the  effect  of  an  arbitration.  In  1914, 
the  board  made  a  special  report  "in  the  mat- 
ter of  the  joint  application  of"  a  company 
75 


MEDIATION  AND  ARBITRATION 

"and  its  Dye  House  Hands  for  an  investiga- 
tion and  a  report."  This  investigation  cov- 
ered wages,  output  of  the  workers,  and  con- 
ditions. The  board  employed  experts 
nominated  by  the  parties  and  "heard  the 
parties  by  their  duly  authorized  representa- 
tives" as  it  does  in  arbitration  proceedings 
on  similar  issues  in  the  boot  and  shoe  indus- 
try. It  did  not  recommend  that  any  par- 
ticular wages  should  be  paid,  but  reported 
that  it  found  the  conditions  and  wages  at 
least  as  good  as  those  given  by  the  company's 
competitors  and  that  therefore  it  had  not 
found  that  the  company  "pays  a  wage  which 
is  unfair  to  its  employees  as  dye-house 
hands."  Both  parties  accepted  this  finding 
as  conclusive;  in  fact  it  was  understood  be- 
fore the  investigation  that  they  would.  The 
emplojTer  had  stated  that  he  would  give  as 
good  conditions  and  wages  as  the  board 
found  in  the  shops  of  other  employers.  This 
76 


INVESTIGATION 

was,  therefore,  an  arbitration  in  everything 
but  name,  although  the  employer  objected  to 
accepting  "arbitration." 

This  case  suggests  the  possibilities  of  a 
kind  of  informal  arbitration  in  cases  in  which 
the  issue  can  be  decided  by  the  determination 
of  matters  of  fact  which  are  in  dispute. 
This  procedure  is  possible  while  a  strike  con- 
tinues, whereas  under  the  law  arbitration  by 
the  board  is  not.  There  is  nothing  in  the 
Massachusetts  law,  however,  specifically  per- 
mitting the  board  to  investigate  and  report 
except  to  ascertain  the  cause  of  a  strike  and 
assign  responsibility  or  blame. 

In  New  York,  also,  investigation  has  been 
resorted  to  more  frequently  in  the  past  few 
years  than  in  the  earlier  years.  Commis- 
sioner Lynch  stated  in  his  first  report  in  1913 
that  it  would  be  his  policy  to  order  investiga- 
tions in  those  disputes  in  which  there  is  a 
large  public  concern.  In  pursuance  of  this 
77 


MEDIATION  AND  ARBITRATION 

policy  public  investigations  were  held  in  the 
next  two  years  in  several  strikes  involving 
public  utilities  or  affecting  the  main  industry 
of  'a  community.  A  lockout  of  employees 
for  membership  in  a  labor  organization,  also, 
was  investigated.  In  most  of  the  cases  a 
settlement  followed  the  investigation,  but  in 
at  least  two  cases  the  employers  rejected  the 
recommendations  of  the  board  of  investiga- 
tion. In  one  of  these  the  employers  publicly 
attacked  the  recommendation  as  against  the 
evidence,  and  declared  that  the  board  was 
prejudiced  in  favor  of  the  men.  The  trade 
union  affiliations  of  two  of  the  three  members 
of  the  board  and  the  fact  that  the  Commis- 
sioner of  Labor  who  ordered  the  investiga- 
tion was  an  ex-president  of  a  national  trade 
union  were  cited  as  indicating  that  the  board 
was  not  impartial.  In  another  case — the 
lockout  in  the  Syracuse  steel  mill  referred  to 
above — the  Commissioner  of  Labor  ordered 

78 


INVESTIGATION 

an  investigation  after  the  mediators  had 
failed  to  secure  a  settlement.  The  board  of 
investigation  recommended  that  the  com- 
pany reemploy  the  members  of  the  union 
without  discrimination  against  them  because 
of  union  membership,  but  the  company 
ignored  the  recommendation. 

It  thus  appears  that  the  use  of  the  power 
of  investigation  has  hastened  settlements  in 
Massachusetts  and — in  a  much  smaller  num- 
ber of  cases — in  New  York.  This  has  come 
about  in  two  ways.  The  investigation  has 
settled  disputed  points  of  fact  or  has  shown 
the  two  sides  that  they  were  nearer  together 
than  they  thought,  and  has  consequently  led 
to  an  agreement  through  further  mediation 
or  through  direct  negotiation.  In  other 
cases,  the  investigation  has  led  one  or  both 
sides,  usually  one  side,  to  recede  from  a  po- 
sition which  it  did  not  care  to  maintain  in 
the  full  light  of  publicity. 
79 


MEDIATION  AND  ARBITRATION 

In  some  cases  the  threat  of  investigation 
has  undoubtedly  led  employers  to  accept 
terms  of  settlement  which  they  considered 
unfair,  in  order  to  avoid  having  business  af- 
fairs not  directly  connected  with  labor  mat- 
ters given  publicity.  This  danger  should 
not  exist  nor  should  coercion  of  this  char- 
acter be  exercised.  The  only  pressure  which 
can  properly  be  exerted  through  investiga- 
tion is  that  of  public  opinion  concentrated 
upon  a  recommendation  believed  by  the 
public  to  be  a  fair  basis  of  settlement. 

PLAN  FOR  BOARDS  OF  MEDIATION  AND 
INVESTIGATION 

The  experience  of  Massachusetts  and  New 
York  leads  to  the  conclusion  that  it  would 
be  very  useful  to  make  provision  in  all  indus- 
trial States  for  the  appointment  of  a  board 
to  hold  an  investigation,  report  on  the  salient 
facts,  and  make  recommendations  in  any  case 
in  which  such  an  investigation  seems  likely 

80 


INVESTIGATION 

to  hasten  a  settlement.  The  occasion  of  the 
appointment  of  the  board,  and  its  constitu- 
tion, plan  of  action,  and  powers  will  be  dis- 
cussed in  order. 

Occasion  of  Appointment. — The  decision 
whether  an  investigation  should  be  made  af- 
ter the  failure  of  mediation  ought  to  rest  with 
the  chief  mediator.  This  officer,  after  his 
work  in  the  case,  is  better  qualified  than  any- 
one else  to  decide  whether  investigation  and 
recommendation  are  likely  to  be  helpful  in 
restoring  industrial  peace.  Moreover,  the 
right  to  call  for  an  investigation,  if  the  par- 
ties are  inclined  to  be  unreasonable,  will  give 
him  a  stronger  position  as  a  mediator  in 
cases  in  which  a  settlement  is  delayed 
through  obstinacy  rather  than  in  defense  of 
a  principle. 

Constitution  of  Board. — Such  investiga- 
tions should  be  intrusted  to  special  boards  of 
three  persons.  One  member  should  be  nom- 
81 


MEDIATION  AND  ARBITRATION 

inated  by  each  party  to  the  controversy,  but 
should  not  himself  be  involved  in  it,  and  these 
two  should  select  a  third.  If  either  side  fails 
to  select  a  representative,  or  the  two  fail  to 
select  a  third  within  a  specified  time,  the 
State  Board  of  Arbitration  should  make  the 
selection. 

There  are  several  reasons  why  investi- 
gations should  be  conducted  by  special 
boards  and  not  by  the  state  mediators  or  by 
the  State  Board  of  Arbitration.  In  the  first 
place,  if  a  public  investigation  results  in  a 
recommendation  displeasing  to  one  of  the 
parties,  the  acceptability  of  the  mediators  or 
arbitrators  in  the  discharge  of  their  main 
functions  may  be  seriously  impaired.  The 
function  of  the  mediator  is  of  primary  im- 
portance and  his  reputation  for  fairness 
should  not  be  put  in  jeopardy  by  requiring 
him  to  make  decisions  on  disputes.  The 
Board  of  Arbitration,  as  is  explained  in  the 
82 


INVESTIGATION 

next  chapter,  renders  its  service  by  passing 
on  questions  submitted  to  it  voluntarily  by 
both  sides.  Moreover,  the  mere  fact  that 
mediation  may  be  followed  by  an  investiga- 
tion in  which  the  mediator  will  appear  in 
the  role  of  an  investigator  would  prevent 
the  mediator  from  securing  those  confiden- 
tial relations  with  the  parties  which  are  es- 
sential to  the  success  of  his  work  as  media- 
tor. 

Secondly,  a  special  board  made  up  in  this 
way  has  an  important  advantage  in  that  it 
gives  each  side  a  direct  representative  on  the 
board.  Another  opportunity  is  thereby  pre- 
sented for  representatives  of  the  two  sides  to 
agree  on  terms  acceptable  to  their  respective 
sides  before  the  investigation  is  carried  to  the 
point  of  a  recommendation.  Practically, 
the  appointment  of  the  special  board  offers 
another  chance  for  joint  conferences  between 
persons  who  are  representatives  of  the  sides 
83 


MEDIATION  AND  ARBITRATION 

but  not  parties  to  the  dispute.  The  expe- 
rience of  .trades  governed  by  agreements 
which  provide  for  the  reference  of  disputes 
to  joint  committees  made  up  of  the  same 
number  of  disinterested  persons  from  each 
side  shows  that  the  possibilities  of  this 
method  of  reference  in  disposing  of  disputes 
are  very  great.  Moreover,  even  if  the  two 
representatives  cannot  reach  an  agreement 
by  themselves  they  may  be  brought  into 
agreement  by  the  chairman  acting  as  a 
mediator.  For  this  reason  the  board  should 
be  termed  a  board  of  "mediation  and  investi- 
gation," or  of  "conciliation  and  investiga- 
tion" as  in  Canada.  In  the  operation  of  the 
Canadian  Industrial  Disputes  Act  the  chair- 
man of  the  board  has  in  many  cases  brought 
the  other  two  members  into  an  agreement  on 
a  recommendation.  The  success  of  the 
boards  as  agencies  of  conciliation  is  due 
largely  to  the  fact  that  so  many  of  the  boards 
84 


INVESTIGATION 

have  had  as  chairmen  persons  who  had  pre- 
viously acted  in  that  capacity. 

Publication  of  Recommendations. — If  no 
agreement  results  during  the  investigation, 
the  report  of  the  board  of  mediation  and  in- 
vestigation, including  its  recommendations, 
should  be  transmitted  to  the  parties  and 
made  public.  The  parties  should  be  invited 
to  a  conference  with  the  board  at  which  the 
recommendations  are  explained  and  the 
grounds  on  which  they  are  based  stated.  If 
the  parties  accept  the  recommendations  of 
the  board,  provision  should  be  made  for  con- 
vening the  board  later  if  any  dispute  as  to 
the  meaning  of  the  terms  of  the  recommenda- 
tions arises. 

Powers  of  the  Board. — The  board  of  medi- 
ation and  investigation  should  be  given  the 
same  powers  of  investigation  as  are  now  con- 
ferred on  boards  of  investigation  in  Massa- 
chusetts and  New  York.  The  expenses  of 
85 


MEDIATION  AND  ARBITRATION 

the  investigation,  including  a  proper  per 
diem  allowance  to  the  members  of  the  board, 
should  be  paid  by  the  State. 

In  certain  classes  of  disputes,  such  as 
those  affecting  transportation  agencies  and 
other  public  utilities,  the  public  is  deeply 
concerned  that  there  shall  be  no  interruption 
of  service.  It  is  not  proposed  to  prohibit 
strikes  or  lockouts  in  these  cases  but  it  is 
believed  that  the  adoption  of  the  plan  here 
outlined  would  greatly  minimize,  if  it  did 
not  entirely  prevent  such  interruptions. 
Great  pressure  would  rest  upon  both  parties 
to  refrain  from  hostilities  until  after  the 
board  of  mediation  and  investigation  had 
made  its  report,  since  any  other  course  would 
bring  public  condemnation.  The  recom- 
mendations made  by  the  board  would  also 
become  a  rallying  point  for  public  opinion, 
if  the  public  had  confidence  in  the  board. 
Experience  up  to  the  present  has  not  clearly 

86 


INVESTIGATION 

established  that  legal  prohibitions  would  be 
more  effective  in  preventing  interruptions 
of  work.  Both  in  Australasia  and  in  Can- 
ada such  interruptions  have  occurred  in  spite 
of  laws  prohibiting  them. 

In  1912,  Sir  George  Askwith,  Chairman 
of  the  Industrial  Council  of  the  United 
Kingdom,  who  has  had  an  extensive  experi- 
ence in  dealing  with  industrial  disputes, 
made  a  study  of  the  operation  of  the  Cana- 
dian Industrial  Disputes  Act.  In  his  re- 
port to  the  Imperial  Government  on  the 
subject  he  expressed  the  following  views  as 
to  the  compulsory  features  of  the  act: 

It  will  have  been  gathered  from  the  preceding 
explanation  of  the  working  of  the  Act  that  where 
it  was  frankly  accepted  as  a  means  of  preventing 
disputes  it  has  worked  extremely  well,  but  where, 
for  reasons,  some  apparent  and  others  which  can 
only  be  guessed  at,  its  introduction  has  been  re- 
sented, it  has  not  succeeded  to  the  same  extent. 
In  such  latter  cases  where,  by  the  imposition  of 
penalties,  efforts  have  been  made  to  enforce  the 

87 


MEDIATION  AND  ARBITRATION 

Act  the  results  have  not  been  satisfactory.  .  .  . 

The  question  then  arises,  what  is  the  real  value 
of  the  Act,  and  can  any  points  in  the  Act  be  suit- 
ably adapted  to  this  country?  Is  the  restriction 
upon  the  right  of  proclaiming  a  lockout  or  strike 
so  much  of  the  essence  of  the  Act  as  to  make  the 
Act  of  no  effect  if  such  restrictions  were  not  com- 
pulsory? And  do  the  penalties  which  are  pro- 
posed to  be  enforced  for  breach  of  the  restrictions 
of  the  Act  add  to  its  value? 

In  my  opinion  the  real  value  of  the  Act  does  not 
lie  in  either  of  these  propositions,  and  certainly 
not  in  the  second.  The  pith  of  the  Act  lies  in 
permitting  the  parties  and  the  public  to  obtain 
full  knowledge  of  the  real  cause  of  the  dispute, 
and  in  causing  suggestions  to  be  made  as  impar- 
tially as  possible  on  the  basis  of  such  knowledge 
for  dealing  with  the  existing  difficulties,  whether  a 
strike  or  lockout  has  commenced  or  not.  This 
action  on  behalf  of  the  public  allows  an  element  of 
calm  judgment  to  be  introduced  into  the  dispute 
which,  at  the  time,  the  parties  themselves  may  be 
unable  to  exercise. 


Ill 

ARBITRATION 

Except  in  Massachusetts,  but  few  disputes 
have  been  submitted  to  the  state  board  for 
arbitration.  In  New  York  no  case  has  been 
submitted  to  the  arbitration  of  the  state  bu- 
reau in  the  past  few  years,  and  in  Ohio  the 
work  of  the  state  board  was  confined  prac- 
tically to  mediation  for  years  before  its  abo- 
lition in  1913.  The  present  Ohio  law  makes 
no  provision  for  a  permanent  state  board  of 
arbitration.  This  difference  in  the  records 
of  the  boards  in  favor  of  the  Massachusetts 
board  is  due  in  part  to  differences  in  the  laws 
constituting  the  boards,  but  in  larger  part 
it  is  due  to  the  activity  of  the  board  in 
making  itself  useful  and  so  establishing  a 
reputation  for  impartiality.  An  analysis  of 
the  results  obtained  in  the  three  States  leads 
89 


MEDIATION  AND  ARBITRATION 

to  the  conclusion  that  there  are  opportunities 
for  a  permanent  board  to  render  real  service 
and  that  a  board  of  the  Massachusetts  type 
would  secure  results  worth  while  in  the  in- 
dustrial States. 

EXISTING  LAW 

The  Arbitrators. — The  Massachusetts  and 
New  York  laws  make  provision  for  a  state 
board  of  arbitration  which  is  authorized  to 
decide  all  disputes  voluntarily  submitted  by 
both  parties.  Until  1913,  provision  was 
made  in  Ohio  for  such  a  board.  In  Massa- 
chusetts the  board  of  arbitration  is  also  the 
board  of  mediation.  In  New  York  the 
board  is  made  up  of  the  chief  mediator  and 
two  other  officers  of  the  Department,  desig- 
nated by  the  Industrial  Commission.1 

Powers  of  the  Boards. — In  both  Massa- 
chusetts and  New  York  the  law  provides  that 

1  Until  May  22,  1915,  by  the  Commissioner  of 
Labor. 

90 


ARBITRATION 

no  case  may  be  submitted  to  the  state  board 
of  arbitration  while  one  of  the  parties  is 
maintaining  a  strike  or  lockout.  It  is  a  pre- 
requisite that  the  employees  shall  be  at  work 
and  remain  at  work  during  the  arbitration 
proceedings.  Both  parties  must  agree,  also, 
to  abide  by  the  decision  of  the  board. 

The  Massachusetts  law  empowers  the 
board,  or  any  member  of  it,  to  summon  wit- 
nesses, administer  oaths,  and  take  testimony. 
The  New  York  law  empowers  the  board  to 
subpena  witnesses  and  compel  their  at- 
tendance, take  and  hear  testimony,  and  call 
for  and  examine  the  books,  papers,  and  docu- 
ments of  any  parties  to  the  cor  trover  sy.  In 
Massachusetts  the  hearings  may  be  private 
"if  requested  by  the  parties" — that  is,  no 
public  notice  is  given  of  the  time  and  place. 
It  is  the  practice  of  the  board  not  to  give  such 
notice  unless  it  is  requested  to  do  so  by  one 
of  the  parties.  In  New  York  the  period  for 
91 


MEDIATION  AND  ARBITRATION 

which  the  board's  decision  is  binding  is  not 
prescribed  in  the  law;  in  Massachusetts  the 
decision  is  binding  for  at  least  sixty  days, 
and  for  at  least  six  months  if  neither  party 
gives  sixty  days'  notice  of  intention  not  to  be 
further  bound  by  it. 

RESULTS 

In  New  York  very  few  cases  have  been 
submitted  for  arbitration  to  a  state  board, 
and  in  the  last  few  years  none  at  all.  In 
Ohio,  too,  in  the  last  few  years  of  the  exist- 
ence of  the  board,  no  cases  were  submitted 
to  it  for  arbitration.  The  Massachusetts 
board,  however,  has  acted  in  a  large  number 
of  cases.  In  the  boot  and  shoe  industry  the 
agreements  between  the  Boot  and  Shoe 
Workers'  Union  and  the  employers  specify 
that  all  questions  of  wages  or  conditions  of 
labor  upon  which  the  parties  cannot  agree 
shall  be  submitted  to  the  state  board  for  de- 
92 


ARBITRATION 

cision.  In  1913,  for  example,  approxi- 
mately eighty  awards  were  made  by  the 
board  in  this  industry.  These  cases  consti- 
tute the  great  bulk  of  the  arbitration  work 
done  by  the  board,  but  they  do  not  exhaust  it. 
Thus  in  1913,  the  board  arbitrated  in  seven 
cases  in  other  industries  than  the  boot  and 
shoe. 

Only  three  of  the  seven  cases  involved  the 
terms  of  a  new  agreement.  Of  the  other 
four,  two  were  discharge  cases;  another  in- 
volved the  right  of  the  employer,  under  an 
existing  agreement,  to  employ  a  particular 
person ;  and  the  fourth,  the  proper  classifica- 
tion, under  the  terms  of  an  agreement,  of 
workmen  into  wage  groups.  The  year  1913 
does  not  seem  to  have  been  an  abnormal 
year  in  the  quantity  or  distribution  of  the 
board's  arbitration  activities,  except  possibly 
in  the  rather  high  proportion  of  cases  involv- 
ing the  terms  of  a  new  agreement.  Only 
93 


MEDIATION  AND  ARBITRATION 

one  of  the  three  cases  in  this  class  was  sub- 
mitted after  a  strike  as  the  result  of  the 
board's  mediation. 

The  Massachusetts  board  exerts  a  con- 
stant pressure  upon  all  the  parties  which  it 
aids  in  reaching  agreements  to  agree  to  ar- 
bitrate points  that  they  may  be  unable  to  set- 
tle in  the  future.  Largely  on  this  account, 
many  joint  agreements  made  in  Massachu- 
setts now  contain  provisions  binding  the  par- 
ties to  refer  questions  in  dispute  to  the  state 
board  of  arbitration,  in  the  event  of  failure  to 
adjust  in  any  other  way  or  to  agree  upon 
other  arbitrators.  The  policy  of  the  Massa- 
chusetts board — and  of  the  mediators  in  the 
other  two  States  as  well — has  been,  on  the 
whole,  to  encourage  the  parties  to  submit 
their  cases  to  arbitrators  of  their  own  choos- 
ing. It  is  only  as  a  last  resort  that  they 
urge  the  disputants  to  refer  questions  to  the 
state  board  for  decision. 
94 


ARBITRATION 

POSSIBILITIES  OF  ARBITRATION  SERVICE 
BY  A  PERMANENT  BOARD 

The  experience  of  the  Massachusetts 
board  in  arbitration  warrants  the  conclusion 
that  there  is  a  proper  and  very  useful  sphere 
of  activity  for  a  permanent  state  board  of 
arbitration.  A  number  of  questions  arise 
from  time  to  time  in  almost  all  trades  which 
do  not  require  a  detailed  knowledge  of  the 
industry  on  the  part  of  the  arbitrating  body, 
as  for  example,  questions  of  discharge  in  al- 
leged violation  of  a  clause  in  an  agreement 
covering  discharges.  The  existence  of  a 
state  board  makes  arbitration  more  likely  in 
such  cases  than  if  a  special  board  had  to  be 
erected  to  pass  on  the  case.  There  are  cer- 
tain other  controversies  which  both  sides  are 
willing  to  have  decided  by  the  application  of 
standards  which  are  matters  of  fact  ascer- 
tainable upon  investigation.  For  example, 
in  many  piece-price  controversies  both  sides 
95 


MEDIATION  AND  ARBITRATION 

are  willing  to  have  the  questions  decided  on 
the  basis  of  what  competing  manufacturers 
pay  for  the  same  operations  under  similar 
working  conditions,  but  each  is  unwilling  to 
accept  the  figures  presented  by  the  other  side 
in  support  of  its  contention.  It  would  be 
easier  for  the  parties  in  such  cases  to  submit 
the  questions  to  an  existing  board  which 
could  appoint  expert  assistants  to  ascertain 
the  prices  and  conditions  in  competing  fac- 
tories, than  to  establish  a  special  tribunal  to 
ascertain  these  facts.  This  is  what  the 
Massachusetts  board  does  in  the  boot  and 
shoe  industry,  and  has  done  recently  in  at 
least  one  textile  case. 

There  are  other  advantages  to  be  derived 
from  a  permanent  board.  Members  of  a 
permanent  board  gain  experience  in  han- 
dling cases  and,  if  they  do  their  work  well, 
accumulate  prestige  for  the  board  and  accus- 
tom   parties    to    the    idea    of    arbitration. 

96 


ARBITRATION 

Where  a  permanent  state  board  that  actu- 
ally arbitrates  from  time  to  time  exists,  the 
framers  of  trade  agreements  are  likely  to 
agree  upon  the  board  as  a  court  of  last  re- 
sort for  the  interpretation  of  the  agreements. 
Finally,  a  permanent  board  which  has  among 
its  members  representatives  of  employers 
and  employees  and  yet  is,  as  a  body,  impar- 
tial can  be  utilized  for  the  nomination  of  an 
odd  member  or  odd  members  for  special  ar- 
bitration boards*'  and  for  boards  of  mediation 
and  investigation,  when  the  other  members 
of  such  boards  fail  to  agree  on  a  nomination. 

PLAN  FOR  A  BOARD  OF  ARBITRATION 

The  Arbitrators. — The  experience  of 
Massachusetts  suggests  that  the  plan  fol- 
lowed in  that  State  in  the  constitution  of  the 
arbitration  board  is  a  good  one.  One  mem- 
ber should  be  an  employer  or  a  member  of 
an  employers'  association,  and  one  a  member 
97 


MEDIATION  AND  ARBITRATION 

of  a  labor  organization;  these  two  should 
nominate  the  third,  but  if  they  are  unable  to 
agree  he  should  be  appointed  by  the  gover- 
nor without  a  nomination. 

The  members  of  the  arbitration  board 
should  not  serve  as  mediators.  A  mediator 
in  a  dispute  can  hardly  escape  receiving  im- 
pressions as  to  what  should  be  conceded  by 
one  or  both  sides.  Moreover,  strong  media- 
tors are  likely  to  make  suggestions  or  even 
recommendations  as  to  what  should  be  done. 
Having  gone  so  far  into  the  merits  of  the 
controversy  they  are,  of  course,  not  as  accept- 
able to  the  parties  as  arbitrators  as  another 
set  of  men  would  be.  Moreover,  the  useful- 
ness of  the  mediators  is  likely  to  be  greater 
if  the  idea  that  they  may  later  have  to  decide 
the  questions  in  controversy  is  not  in  the 
minds  of  the  parties.  A  mediator's  chief 
function  is  to  help  the  parties  to  settle  the  dis- 
pute themselves,  and  this  will  appear  more 
98 


ARBITRATION 

clearly,  and  make  his  services  more  accept- 
able at  the  outset,  if  there  is  no  danger  that 
he  will  urge  that  he  and  his  colleagues  be  al- 
lowed to  decide  the  terms  of  settlement. 

The  term  of  not  more  than  one  member  of 
the  board  of  arbitration  should  expire  in  any 
year.  A  six-year  term  is  preferable  to  a 
three-year  term.  A  comparison  of  the  ex- 
perience of  Massachusetts  with  that  of  Ohio 
indicates  that  the  annual  salary  method  of 
payment  is  preferable  to  that  of  a  per  diem 
payment  if  men  are  expected  to  give  the 
greater  part  of  their  time  to  the  work.  Both 
these  boards,  however,  were  also  intended  to 
mediate  and  to  investigate  as  well  as  to  ar- 
bitrate. It  is  doubtful  if  the  work  of  a  state 
board  of  arbitration — with  no  other  func- 
tion— would  occupy  the  greater  part  of  the 
time  of  its  members,  at  least  in  the  first  few 
years.  The  case  of  Massachusetts  is,  of 
course,  exceptional  in  that  the  arbitration 


MEDIATION  AND  ARBITRATION 

agreements  in  the  boot  and  shoe  industry 
specify  the  state  board  of  arbitration  as  the 
court  of  last  resort.  In  other  States  it 
would  probably  be  better  at  the  outset  to  pay 
the  members  for  the  time  actually  given  to 
the  work.  In  appointing  members  to  the 
board,  care  should  be  taken  to  select  men  who 
can  serve  whenever  and  as  long  as  they  may 
be  needed.  Men  who  are  less  well-known 
and  esteemed  will  do  more  effective  work — if 
honest,  intelligent,  and  fair-minded — than 
men  of  known  high  abilities  and  of  high 
reputation  who  would  find  it  impossible  to 
devote  sufficient  time  and  energy  to  the 
work. 

Expert  Assistants. — A  feature  of  the 
Massachusetts  law,  which  commends  itself 
highly,  is  the  provision  made  for  the  em- 
ployment of  expert  assistants  by  the  board 
in  arbitration  cases.  Each  party  to  the  ar- 
bitration may  nominate  a  person  or  persons 
100 


ARBITRATION 

to  act  as  an  expert  assistant  to  the  board  and 
the  board  may  then  appoint -one  from  the 
nominees  of  each  side.  .-The  fm^ipjiiof*. the 
expert  assistants  is  to  obtain  for  the  board, 
under  its  direction,  "information  concerning 
the  wages  paid  and  the  methods  and  grades 
of  work  prevailing  in  establishments  within 
the  commonwealth  similar  to  that  in  which 
the  controversy  exists."  The  experts  must 
be  heard  by  the  board  before  its  final  decision 
in  the  case  is  handed  down.  They  are  paid 
by  the  State  at  the  rate  of  seven  dollars  a 
day  and  traveling  expenses. 

The  employment  of  experts  is  confined  al- 
most exclusively  to  the  cases  submitted  from 
the  boot  and  shoe  industry,  because  nearly 
all  of  the  cases  from  that  industry  are  piece- 
price  cases,  while  very  few  of  the  cases  from 
other  industries  are  of  this  kind.  The  ex- 
perts make  their  inquiries  together  and  may 
not  submit  any  evidence  to  the  board  on 
101 

WWVEKSITY  OF  CAUFOKWA 
RIVERSIDE 


MEDIATION  AND  ARBITRATION 

which  they  are  not  .agreed.  The  success  of 
the  board  as  a  board  of  arbitration  for  the 
boot  and  shoe  industry,' is  due  chiefly  to  the 
use  of  the  expert  assistants.  It  seems  ad- 
visable, therefore,  that  similar  provision  for 
the  employment  of  expert  assistants  nom- 
inated by  the  parties  should  be  made  in  any 
plan  of  state  arbitration.  The  subject  mat- 
ter of  their  inquiries  should  not,  however,  be 
limited  to  wages  paid  and  the  methods  and 
grades  of  work  prevailing;  the  board  should 
be  allowed  to  direct  them  to  inquire  into  and 
report  on  any  matters  which  the  board  feels 
are  pertinent  to  the  case. 

Powers  of  the  Board. — The  arbitration 
board  should  be  given  all  the  powers  in  the 
way  of  compelling  the  attendance  of  wit- 
nesses and  testimony  under  oath,  and  the 
production  of  books  and  papers,  which  it  re- 
quires to  secure  the  information  necessary  to 
reach  a  decision.  The  need  of  compulsion 
102 


ARBITRATION 

will  seldom  arise,  however,  for  parties  who 
submit  voluntarily  to  arbitration  will  ordi- 
narily supply  the  board  with  all  the  informa- 
tion in  their  possession.  Yet  the  parties  will 
be  more  likely  to  submit  to  arbitration  such 
questions  as  piece  prices,  if  assured  that  the 
board  will  be  able  to  get  exact  data.  More- 
over, it  may  be  desirable  for  the  board  to  se- 
cure trustworthy  information  as  to  wages  or 
working  conditions  in  establishments  not  in- 
volved in  the  controversy,  and  such  data  may 
not  be  obtainable  unless  the  board  has  the 
powers  of  a  court.  It  should  be  stipulated 
that  no  information  as  to  an  employer's  busi- 
ness except  as  to  wages  or  working  condi- 
tions shall  be  made  public  by  the  board  unless 
he  agrees  beforehand  that  it  shall  be. 

ENCOURAGEMENT  OF  FORMATION  OF 
SPECIAL  BOARDS 

In  all  three  of  the  States  studied  a  prefer- 
ence was  found,  in  most  classes  of  cases,  for 
103 


MEDIATION  AND  ARBITRATION 

special  boards  over  a  permanent  state  board, 
as  an  arbitrating  body,  and  in  all  three 
States  the  laws  encourage  the  formation  of 
such  boards.  Both  employers  and  workers 
expressed  generally  a  disinclination  to  leave 
matters  to  the  decision  of  persons  who 
"know  nothing  about  the  business."  In 
fact,  the  cases  which  are  likely  to  be  referred 
to  a  permanent  State  board  in  any  number 
are  limited  in  character — cases  involving  dis- 
charges in  alleged  violation  of  agreement,  the 
interpretation  of  existing  agreements,  and 
the  settlement  of  piece  prices  when  both  sides 
are  satisfied  to  accept  prices  set  on  the  basis 
of  what  competing  factories  are  paying.  In 
all  these  cases  there  is  agreement  between  the 
parties  as  to  the  general  principles  which 
should  govern  the  decision — it  is  merely  the 
application  of  the  principle  which  is  in  doubt. 
In  such  matters  as  the  basic  or  minimum  rate 
of  wages  to  be  paid,  the  length  of  the  work- 
104 


ARBITRATION 

ing  day,  and  the  ratio  of  apprentices,  the 
parties,  if  they  are  willing  to  arbitrate  at  all, 
will  in  all  likelihood  continue  to  prefer  spe- 
cial boards  constituted  by  themselves.  In 
Massachusetts,  preference  is  frequently 
shown  for  a  special  board  when  certain  classes 
of  questions  are  involved,  because  it  is  felt 
that  the  state  board  will  decide  these  ques- 
tions by  the  application  of  certain  standards 
which  the  party  is  not  willing  to  accept. 
For  example,  it  is  widely  believed  that  the 
board  will  decide  a  wage  demand  by  compari- 
son with  wages  paid  for  the  same  work  under 
similar  conditions  elsewhere  in  the  State. 
Workers  who  are  receiving  higher  wages 
than  are  paid  in  competing  cities  will,  there- 
fore, naturally  avoid  arbitration  by  the  state 
board. 

One  of  the  clearest  opportunities  for  serv- 
ice by  the  State  in  promoting  resort  to  arbi- 
tration lies  in  facilitating  the  formation  of 
105 


MEDIATION  AND  ARBITRATION 

special  boards  of  arbitration  through  aiding 
the  appointees  of  the  parties  in  the  selection 
of  the  odd  man  or  men.  The  state  board  of 
arbitration  is  the  logical  body  to  perform  this 
duty  for  the  State.  The  law  should  there- 
fore specifically  empower  the  state  board, 
when  requested,  to  select  a  man  or  men  to  act 
with  the  appointees  of  the  parties.  It 
should  also  allow  the  state  board  itself  to  act 
with  the  appointees  if  invited  by  them. 

In  all  three  of  the  States  studied,  as  noted 
above,  the  law  encourages  the  formation  of 
special  boards,  known  as  "local"  or  "tempo- 
rary" boards.  The  New  York  and  Massa- 
chusetts laws  prescribe  the  constitution  of 
these  boards.  The  New  York  law  provides 
that  one  member  must  be  chosen  by  the  em- 
ployer or  employers  and  one  by  the  em- 
ployees and  that  these  two  shall  select  the 
third.  The  Massachusetts  law  provides  that 
the  local  board  shall  be  made  up  in  the  same 
106 


ARBITRATION 

way  or  composed  of  "three  members  mutu- 
ally agreed  upon." 

The  New  York  law  allows  the  local  board, 
through  its  chairman,  to  "subpena  wit- 
nesses, compel  their  attendance,  and  to  take 
and  hear  testimony."  It  does  not  give  the 
local  boards  the  power  given  to  the  state 
board  to  "call  for  and  examine  books,  papers 
and  documents  of  any  parties  to  the  contro- 
versy." Under  the  Massachusetts  law  and 
the  old  Ohio  law  local  boards  have  all  the 
powers  of  the  state  board,  and  as  any  mem- 
ber of  the  board  in  Massachusetts  has  all  the 
powers  of  the  board  to  summon  and  examine 
witnesses,  books,  papers,  etc.,  it  is  under- 
stood by  the  state  board  that  any  member  of 
a  local  board  has  these  powers  also.  It  has 
been  urged  that  no  member  of  a  special  board 
should  be  allowed  to  exercise  these  powers 
alone.  The  fact  that  the  workmen's  ap- 
pointee on  a  local  board  has  the  power  alone 
107 


MEDIATION  AND  ARBITRATION 

to  compel  the  production  of  the  employer's 
books,  or  to  put  the  employer  on  the  stand 
and  question  him,  is  said  to  deter  many  em- 
ployers from  submitting  questions  to  such 
boards. 

The  New  York  law  requires  that  for  a 
local  board  to  be  constituted  under  the  law 
with  the  powers  described  above,  each  mem- 
ber must  sign  an  agreement  to  serve  and  must 
take  an  oath  to  discharge  his  duties  faith- 
fully and  impartially.  The  Massachusetts 
law  does  not  require  that  formal  notice  of 
the  formation  of  the  board  shall  be  given. 
If  each  party  selects  its  representative  and 
these  two  select  a  third,  they  may  proceed 
forthwith  to  exercise  all  the  powers  of  the 
state  board. 

The  New  York  law  makes  no  provision 
for  the  payment  of  members  of  local  boards 
of  arbitration.  The  Massachusetts  law  pro- 
vides for  payment  of  the  arbitrators  by  the 
108 


ARBITRATION 

local  unit  of  government,  but  payment  is  to 
be  made  only  with  the  approval  in  writing  of 
the  local  authorities,  and  the  remuneration  is 
only  three  dollars  a  day  for  each  day  of 
actual  service,  which  may  not  exceed  ten 
days.  The  old  Ohio  law  contained  a  similar 
provision.  The  local  authorities  in  Ohio  at 
times  refused  to  pay,  however,  and  the  state 
board  repeatedly  urged  that  the  law  be  so 
amended  as  to  compel  payment  of  the  per 
diem  and  traveling  expenses  due,  upon  cer- 
tification of  the  amount  by  the  state  board. 

On  the  whole,  these  provisions  seem  to  be 
of  doubtful  value  in  promoting  resort  to  ar- 
bitration. If  the  State  facilitates  the  forma- 
tion of  special  boards  by  helping  the  parties 
to  get  a  chairman  it  has  done  all  that  can 
reasonably  be  expected  of  it.  The  parties 
should  themselves  pay  the  members  and 
defray  the  expenses  of  the  proceedings. 
There  seems  to  be  no  good  reason  for  giving 
109 


MEDIATION  AND  ARBITRATION 

these  special  boards  the  powers  of  a  state 
board  in  compelling  testimony  under  oath  or 
the  production  of  books.  If  the  issue  hinges 
on  a  matter  of  fact  which  is  ascertainable 
only  by  court  procedure  it  should  be  submit- 
ted to  the  state  board.  If  the  issue  is  a  mat- 
ter of  industrial  policy  the  special  board 
should  contain  within  itself  sufficient  infor- 
mation as  to  the  industry,  or  be  able  to  get  it, 
without  using  the  powers  of  a  court  to  decide 
the  question  before  it. 


IV 

PROPOSED  PLAN  FOR  A  STATE  SYSTEM  OF 
MEDIATION,  INVESTIGATION,  AND  AR- 
BITRATION 

The  following  plan  contains  the  essential 
provisions  necessary  to  give  the  foregoing 
suggestions  legal  effect. 

I 

There  shall  be  a  chief  mediator,  who  shall 
be  appointed  by  the  governor  on  the  nomi- 
nation of  the  Industrial  Commission  for  a 
term  of  seven  years.  He  shall  receive  an 
annual  salary  of  five  thousand  dollars  and 
his  necessary  traveling  expenses. 

The  chief  mediator  may  appoint  not  more 

than  two  assistant  mediators.     Each  shall 

perform  such  duties  as  are  assigned  to  him 

by  the  chief  mediator.     The  term  of  office 

111 


MEDIATION  AND  ARBITRATION 

of  each  assistant  mediator  shall  be  one  year. 
Each  shall  receive  an  annual  salary  of  not 
less  than  two  thousand  nor  more  than  three 
thousand  dollars,  to  be  determined  for  each 
by  the  chief  mediator,  and  his  necessary 
traveling  expenses. 

Whenever  a  strike  or  lockout  occurs  within 
the  State,  or  an  industrial  dispute  arises 
which  seriously  threatens  to  terminate  in  a 
strike  or  lockout,  the  chief  mediator  shall,  if 
requested  by  one  or  both  of  the  parties  to  the 
dispute,  endeavor  to  bring  about  a  settlement 
of  the  controversy.  Whenever  the  chief 
mediator  has  knowledge,  otherwise  than 
through  a  request  for  intervention  from  one 
or  both  of  the  parties  to  the  dispute,  that  a 
strike  or  lockout  or  an  industrial  dispute 
which  threatens  to  terminate  in  a  strike  or 
lockout  exists  within  the  State,  he  shall  make 
inquiries  as  to  the  nature  of  the  dispute  and 
of  the  number  of  persons  involved,  and  if  in 
112 


PLAN  FOR  A  STATE  SYSTEM 

his  judgment  an  offer  of  mediation  is  advis- 
able he  shall  offer  his  services  or  those  of  one 
or  more  of  the  assistant  mediators  to  the 
parties  and  endeavor  to  secure  an  amicable 
settlement  of  the  controversy 

ii 

If  the  chief  mediator  is  unable  to  bring 
about  an  agreement  in  any  industrial  dispute 
or  an  agreement  to  arbitrate  the  dispute,  and 
no  settlement  is  otherwise  reached,  and  if  in 
his  judgment  it  is  advisable  that  a  special 
board  of  mediation  and  investigation  be  ap- 
pointed to  endeavor  to  secure  a  settlement  of 
the  dispute,  he  shall  make  application  in  due 
form  to  the  State  Board  of  Arbitration  for 
the  appointment  of  such  a  board,  and  the 
State  Board  of  Arbitration  shall  proceed 
forthwith  to  the  establishment  of  such  a 
board  of  mediation  and  investigation. 

Every  board  of  mediation  and  investiga- 
tion shall  consist  of  three  persons,  to  be  ap- 
113 


MEDIATION  AND  ARBITRATION 

pointed  by  the  State  Board  of  Arbitration 
upon  application  made  in  due  form  by  the 
chief  mediator  of  the  State. 

Upon  receipt  of  such  application  the  State 
Board  of  Arbitration  shall  notify  each 
party  to  the  controversy  that  such  a  board 
is  to  be  established  and  request  each  party 
to  nominate  in  writing  one  person  not  a  party 
to  the  controversy  to  serve  as  a  member  of 
such  board.  If  such  nomination  is  made 
within  three  days  the  State  Board  of  Arbi- 
tration shall  appoint  the  person  so  nominated 
a  member  of  the  board  of  mediation  and  in- 
vestigation, and  if  either  party  fails  to  nomi- 
nate a  person  within  three  days,  the  State 
Board  of  Arbitration  shall  appoint  a  prop- 
erly qualified  person  to  serve.  The  two  per- 
sons so  appointed  shall  nominate  a  person  to 
serve  as  the  third  member  of  the  board  and 
the  person  so  nominated  shall  be  appointed  a 
member  of  the  board  by  the  State  Board  of 
114 


PLAN  FOR  A  STATE  SYSTEM 

Arbitration,  and  shall  act  as  its  chairman. 
If  within  three  days  after  the  appointment 
of  the  first  two  members  no  nomination  of  a 
third  person  is  received,  the  State  Board  of 
Arbitration  shall  proceed  to  appoint  a  third 
member  of  the  board  of  mediation  and  in- 
vestigation and  the  person  so  appointed  shall 
act  as  chairman  of  the  board. 

The  chairman  of  the  board  of  mediation 
and  investigation  shall  convene  the  board  as 
soon  as  may  be  practicable,  in  the  locality  in 
which  the  strike  or  lockout  has  occurred  or 
is  threatened,  or  if  more  than  one  locality 
within  the  State  is  affected,  in  that  locality 
which  in  his  judgment  is  most  advisable, 
and  the  board  shall  proceed  to  ascertain  the 
causes  of  the  dispute  and  other  facts  perti- 
nent to  the  failure  of  the  parties  to  agree 
upon  an  amicable  adjustment,  and  endeavor 
to  secure  an  amicable  settlement  of  the  dis- 
pute. 

115 


MEDIATION  AND  ARBITRATION 

If  the  board  of  mediation  and  investiga- 
tion is  unable  to  secure  an  amicable  settle- 
ment of  the  controversy  it  shall  make  a  writ- 
ten report  stating  the  causes  of  the  contro- 
versy and  such  other  facts  as  in  its  judgment 
are  responsible  for  the  failure  of  the  parties 
to  agree  upon  a  settlement,  and  shall  recom- 
mend what  should  be  done  by  each  of  the 
parties  to  the  controversy.  A  copy  of  the 
report  shall  be  transmitted  to  the  governor 
of  the  State  and  a  copy  filed  with  the  mayor 
or  clerk  of  each  city  or  town  in  which  the 
controversy  exists,  to  be  open  to  public  in- 
spection. A  copy  of  the  report  shall  also  be 
transmitted  to  each  of  the  parties  to  the  con- 
troversy. 

The  board  may,  if  it  deems  advisable,  ap- 
point a  time  and  place  for  a  conference  with 
each  of  the  parties  on  the  terms  of  its  recom- 
mendations. Either  party  to  the  original 
controversy  may  at  any  time  within  one  year 
116 


PLAN  FOR  A  STATE  SYSTEM 

from  the  date  of  the  first  report  of  the  special 
board  apply  to  the  chairman  of  such  board 
for  a  reconvening  of  the  board  to  decide  any 
dispute  arising  as  to  the  meaning  of  any  of 
the  terms  of  the  written  recommendations 
made  by  the  board,  provided  that  such  party 
has  previously  agreed  in  writing  to  be  bound 
by  such  recommendation  for  a  period  of  at 
least  six  months,  and  the  chairman  shall  en- 
deavor to  reconvene  the  board  forthwith  for 
this  purpose. 

Before  entering  upon  their  duties  the 
members  of  the  board  shall  be  sworn  to  the 
faithful  performance  thereof.  The  board 
shall  be  empowered  to  compel  the  appearance 
of  witnesses  and  to  administer  oaths  to  wit- 
nesses and  to  compel  the  production  of  books 
and  papers  which  it  believes  to  contain  in- 
formation pertinent  to  the  matters  in  dispute. 
The  fees  of  witnesses  for  travel  and  attend- 
ance shall  be  the  same  as  those  for  witnesses 
117 


MEDIATION  AND  ARBITRATION 

before  the  highest  court  of  the  State.  The 
board  may  hold  sessions  in  any  locality 
within  the  State  where  it  deems  such  sessions 
necessary.  The  board  may  also  appoint 
properly  qualified  expert  assistants,  one 
upon  nomination  made  by  each  party,  to  ob- 
tain and  report  to  the  board  information 
necessary  to  the  proper  discharge  of  its 
duties  by  the  board.  The  board  may  also  ap- 
point such  other  expert  assistants  as  it  may 
judge  necessary.  The  expert  assistants 
shall  receive  seven  dollars  a  day  for  each  day 
of  actual  service,  and  their  necessary  travel- 
ing expenses. 

Each  member  of  the  special  board  of  medi- 
ation and  investigation  shall  receive  ten  dol- 
lars for  each  day  of  actual  service,  and  his 
necessary  traveling  expenses. 

in 
There  shall  be  a  State  Board  of  Arbitra- 
tion, consisting  of  three  persons,  to  be  ap- 
118 


PLAN  FOR  A  STATE  SYSTEM 

pointed  by  the  Governor.  Of  the  three 
members  first  appointed  one  shall  be  ap- 
pointed for  a  term  of  six  years,  one  for  four 
years,  and  one  for  two  years,  and  thereafter 
the  term  for  each  member  shall  be  six  years. 
One  member  of  the  board  shall  be  an  em- 
ployer, or  shall  be  selected  from  an  associa- 
tion representing  employers  of  labor,  one 
shall  be  selected  from  a  labor  organization, 
and  the  third  shall  be  appointed  upon  the 
recommendation  of  the  other  two.  If  these 
two  members  fail  to  nominate  a  third  at  least 
thirty  days  prior  to  the  expiration  of  a  term 
or  within  thirty  days  after  the  occurrence  of 
a  vacancy,  the  Governor  shall  then  appoint 
a  third  member  without  such  nomination. 
The  third  member  shall  act  as  chairman  of 
the  board.  Each  member  shall,  before  enter- 
ing upon  the  duties  of  his  office,  be  sworn 
to  the  faithful  performance  thereof.  The 
board  may  appoint,  and  remove,  a  secretary, 
119 


MEDIATION  AND  ARBITRATION 

who  shall  not  be  a  member  of  the  board,  and 
who  shall  receive  an  annual  salary  of  not  less 
than  two  thousand  dollars  nor  more  than 
three  thousand  dollars,  as  may  be  determined 
by  the  board. 

Any  industrial  dispute  existing  within  the 
State,  which  involves  twenty-five  or  more 
persons  and  seriously  threatens  to  result  in  a 
strike  or  lockout,  may  be  submitted  by  the 
parties  to  the  State  Board  of  Arbitration  for 
decision.  The  application  shall  be  signed  by 
the  employer  and  by  a  majority  of  his  em- 
ployees in  the  department  in  which  the  con- 
troversy exists,  and  if  signed  by  an  agent 
claiming  to  represent  a  majority  of  the  em- 
ployees, the  board  shall  satisfy  itself  that  he 
is  duly  authorized  to  do  so;  but  the  names  of 
the  employees  giving  the  authority  shall  be 
kept  secret.  The  application  shall  contain 
a  concise  statement  of  the  existing  contro- 
versy and  a  promise  not  to  resort  to  a  strike 
120 


PLAN  FOR  A  STATE  SYSTEM 

or  lockout  pending  the  decision  of  the  board, 
if  given  within  two  weeks  of  the  date  of  the 
filing  of  the  application,  and  to  accept  such 
decision  as  binding  for  a  period  of  one  year 
or  until  sixty  days  after  written  notice  has 
been  given  to  the  other  party,  and  to  the 
board,  of  intention  not  to  be  bound  by  it. 

Upon  receipt  of  such  application  or  appli- 
cations signed  by  both  parties  to  the  contro- 
versy, the  board  shall  proceed  as  soon  as  may 
be  practicable  to  hear  the  parties  or  their 
duly  authorized  representatives  and  to  take 
such  other  testimony,  examine  such  books 
and  papers,  and  institute  such  other  inquiries 
as  it  may  deem  necessary  for  the  proper  dis- 
charge of  its  duties,  and  shall  then  make  a 
written  decision  stating  what  shall  be  done  or 
submitted  to  by  each  party  to  the  contro- 
versy. A  copy  of  the  decision  shall  be  trans- 
mitted to  each  of  the  parties  and  a  copy  en- 
tered in  the  records  of  the  board.  If  either 
121 


MEDIATION  AND  ARBITRATION 

applicant  fails  to  perform  the  promise  made 
in  the  application  the  board  shall  proceed  no 
further  toward  a  decision  unless  requested  in 
writing  by  the  adverse  party. 

In  all  arbitration  cases  above  described  the 
board  shall  have  power  to  summon  witnesses, 
administer  oaths  and  to  compel  the  produc- 
tion of  such  books  and  papers  as  the  board 
may  believe  to  contain  information  bearing 
directly  upon  the  matters  in  dispute.  But 
no  information  as  to  the  business  of  any  em- 
ployer other  than  as  to  wages  or  conditions 
of  employment  shall  be  received  publicly  or 
made  public  by  the  board  without  the  con- 
sent of  such  employer.  The  fees  of  wit- 
nesses before  the  board,  for  attendance  and 
travel,  shall  be  the  same  as  those  of  witnesses 
before  the  highest  court  of  the  State. 

In  all  arbitration  cases  submitted  to  the 
board  each  party  may  nominate  in  writing 
fit  persons  to  act  as  expert  assistants  to  the 
122 


PLAN  FOR  A  STATE  SYSTEM 

board  and  the  board  may  appoint  one  from 
among  the  persons  so  nominated  by  each 
party.  Such  expert  assistants  must  be 
skilled  in  and  conversant  with  the  business  or 
trade  in  which  the  controversy  exists.  They 
shall  be  sworn  by  the  board  to  the  faithful 
performance  of  their  duties  and  shall,  under 
the  direction  of  the  board,  obtain  and  re- 
port such  information  as  the  board  may 
judge  necessary  to  the  decision  of  the  case, 
and  they  may  submit  to  the  board  at  any 
time  before  a  final  decision  is  given  any  facts, 
advice,  arguments,  or  suggestions  which  they 
may  consider  applicable  to  the  case.  No  de- 
cision shall  be  announced  by  the  board  in  a 
case  in  which  expert  assistants  have  acted, 
without  notice  to  them  of  a  time  and  place 
for  a  conference  with  the  board  on  the  mat- 
ters included  in  the  proposed  decision. 

The  board  may  appoint  such  additional 
expert  assistants  as  it  deems  necessary,  with- 
123 


MEDIATION  AND  ARBITRATION 

out  nomination  by  the  parties,  which  as- 
sistants shall  be  qualified  in  like  manner  and 
shall  perform,  under  the  direction  of  the 
board,  duties  similar  to  those  performed  by 
experts  who  are  nominated  by  the  parties. 
The  expert  assistants  shall  receive  from  the 
State  seven  dollars  each  for  each  day  of 
actual  service  and  their  necessary  traveling 
expenses. 

It  shall  be  the  duty  of  the  State  Board  of 
Arbitration  to  proceed  immediately  upon  ap- 
plication in  due  form  by  the  chief  mediator 
of  the  State,  to  the  establishment  of  a  special 
board  of  mediation  and  investigation  as  pro- 
vided in  the  act  governing  the  establishment 
of  such  boards. 

The  members  of  the  Board  of  Arbitration 
shall  receive  from  the  State  ten  dollars  each 
for  each  day  of  actual  service,  and  their 
necessary  traveling  expenses. 
124 


PLAN  FOR  A  STATE  SYSTEM 

IV 

Any  parties  to  an  industrial  dispute  ex- 
isting within  the  State,  who  have  agreed  in 
writing  to  submit  the  matters  in  controversy 
to  a  board  of  arbitration  to  be  made  up  of 
one  or  more  persons  chosen  by  each  of  the 
parties  and  one  or  more  persons  to  be  selected 
by  the  persons  appointed  by  the  parties,  may, 
upon  the  failure  of  their  appointees  to  agree 
upon  an  additional  person,  make  a  written 
application  which  shall  be  signed  by  both 
parties,  or  their  duly  authorized  representa- 
tives, to  the  State  Board  of  Arbitration,  stat- 
ing these  facts  and  requesting  the  State 
Board  of  Arbitration  to  nominate  a  person 
or  persons  to  act  as  an  additional  member  or 
members  of  such  board.  Such  application 
may  also  be  made  by  the  persons  chosen  by 
the  parties  to  act  as  members  of  the  board. 
The  State  Board  of  Arbitration  shall  within 
125 


MEDIATION  AND  ARBITRATION 

three  days  of  the  receipt  of  such  application 
nominate  a  person  to  act  as  the  additional 
member  of  the  board.  If  requested  by  both 
parties  the  three  members  of  the  state  board 
may  act  with  the  appointees  of  the  parties 
as  a  board  of  arbitration,  but  when  acting  as 
members  of  such  a  board  they  shall  exercise 
none  of  the  powers  of  the  State  Board  of  Ar- 
bitration. 


n 


NATIONAL  AGENCIES  OF  MEDI- 
ATION, INVESTIGATION 
AND  ARBITRATION 


PROPOSED  NEW  AGENCIES 
THE  NEED  FOR  NEW  NATIONAL  AGENCIES 

The  results  achieved  under  the  Erdmann 
and  Newlands  acts  naturally  suggest  that 
provision  should  be  made  for  national  media- 
tion and  voluntary  arbitration  of  the  kind 
provided  for  in  the  Newlands  Act  in  fields  to 
which  that  act  does  not  apply.  Under  the 
Newlands  Act  the  mediators  may  offer  their 
services  only  in  disputes  involving  railroad 
employees  actually  engaged  in  train  move- 
ment. There  are  four  large  fields  in  which 
national  mediation  and  national  provision 
for  arbitration  seem  desirable,  to  which  the 
Newlands  Act  does  not  extend:  (1)  dis- 
putes involving  railroad  employees  not  en- 
129 


MEDIATION  AND  ARBITRATION 

gaged  in  moving  trains;  (2)  disputes  involv- 
ing the  employees  of  agencies  of  interstate 
commerce  other  than  railroads;  (3)  disputes 
involving  workmen  and  employers  in  two  or 
more  States;  (4)  disputes  in  which  the  inter- 
vention of  the  President  of  the  United  States 
has  been  requested  in  order  to  protect  against 
domestic  violence.  The  creation  of  a  na- 
tional agency  of  mediation  and  voluntary  ar- 
bitration, with  power  to  act  in  disputes  in  all 
four  of  these  fields,  would  serve  highly  de- 
sirable ends. 

At  the  present  time  mediation  in  disputes 
in  all  of  these  fields  is  possible  through  of- 
ficers of  the  Department  of  Labor.  The 
Act  of  March  4,  1913,  creating  the  depart- 
ment, provided  that: 

The  Secretary  of  Labor  shall  have  power  to  act 
as  mediator  and  to  appoint  commissioners  of  con- 
ciliation in  labor  disputes  wherever,  in  his  judg- 
ment, the  interests  of  industrial  peace  may  require 
it  to  be  done. 

130 


PROPOSED  NEW  AGENCIES 

The  work  of  the  department  in  this  respect 
has  been  considerably  handicapped  by  lack 
of  funds  to  secure  experienced  mediators. 
There  is  reason  to  believe,  however,  that 
mediation  in  these  fields  would  be  much 
more  effective  if  carried  out  along  the  lines 
of  the  Newlands  Act  than  it  can  be  made  by 
the  Department  of  Labor.  The  reasons  for 
this  will  appear  below.  Moreover,  it  is  de- 
sirable that  certain  provisions  should  be  in- 
cluded, such  as  those  for  assistance  in  con- 
stituting boards  of  arbitration  and  for  the 
formation  of  boards  of  mediation  and  investi- 
gation, which  are  not  found  in  the  present 
law  and  which  are  not  likely  to  be  most  ef- 
fective if  their  administration  is  vested  in  the 
Department  of  Labor. 

If  effective  provision  is  to  be  made  for 

mediation  and  arbitration  in  disputes  of  the 

kind  indicated  above,  it  must  be  national. 

It  is  evident,  from  an  examination  of  the 

131 


MEDIATION  AND  ARBITRATION 

facts,  that  state  agencies  of  mediation,  arbi- 
tration, and  investigation  cannot  be  expected 
to  meet  the  need.  Even  if  effective  state 
agencies  were  available  in  all  the  industrial 
States,  as  it  is  hoped  that  they  soon  will  be, 
they  could  not  be  expected  to  secure  settle- 
ments in  disputes  which  are  interstate  in  ex- 
tent. State  mediators  are  practically  help- 
less, for  example,  in  the  face  of  a  strike  of 
railway  shopmen  which  extends  over  the  line 
of  an  interstate  road,  as  such  strikes  tend 
more  and  more  to  do.  The  report  of  the 
State  Board  of  Arbitration  of  Ohio  for  1910 
related  a  case  in  point.  Trouble  arose  be- 
tween the  machinists  and  the  Baltimore  and 
Ohio  Railroad  Company  at  the  Mt.  Clare 
shops  in  Baltimore,  over  the  attempt  of  the 
company  to  extend  the  piece-work  system. 
Conferences  were  held  between  the  national 
officers  of  the  machinists'  union  and  the  gen- 
eral officers  of  the  company,  but  they  failed 
132 


PROPOSED  NEW  AGENCIES 

to  result  in  a  settlement,  and  after  a  referen- 
dum vote  a  general  strike  of  machinists  in 
the  shops  of  the  Baltimore  and  Ohio  Rail- 
road was  inaugurated.  The  machinists  at 
the  shops  in  Newark,  Ohio,  were  involved, 
among  others,  and  the  Ohio  board  found  it- 
self helpless  to  secure  a  settlement  there. 
The  board  reported  as  follows: 

The  men  at  the  Newark  shop  made  no  complaint 
as  to  wages,  working  conditions  or  other  matters. 
They  went  out  in  obedience  to  the  order  of  the 
union  as  they  did  at  all  other  shops  and  were 
powerless  to  settle  the  matter.  The  strike  in- 
volved twelve  (12)  shops  and  about  nine  hundred 
(900)  men  in  Pennsylvania,  Indiana,  and  West 
Virginia  and  six  (6)  shops  and  two  hundred  (200) 
men  in  Ohio.  The  strike  was  interstate  in  charac- 
ter and  we  were  officially  informed  could  only  be 
settled  by  the  general  officers  of  the  company  and 
the  national  officers  of  the  machinists'  organiza- 
tion. 

The  same  problem  is  presented  in  many 
labor  disputes  involving  agencies  of  inter- 
133 


MEDIATION  AND  ARBITRATION 

state  commerce.  A  strike  by  organized 
workers  against  such  a  company  is  likely  to 
extend  beyond  the  limits  of  one  State  and  to 
involve  issues  which  both  sides  wish  to  have 
disposed  of  in  a  single  settlement.  This  has 
been  the  case,  for  example,  in  several  strikes 
on  the  Great  Lakes.  In  at  least  one  of  these 
cases  the  mediators  of  several  States  met 
and  acted  jointly  in  offering  mediation. 
Their  mediation,  however,  was  unavailing. 

There  is  another  class  of  disputes,  which, 
though  they  do  not  involve  interstate 
agencies,  resemble  the  class  of  disputes  just 
considered,  in  that  they  affect  plants  and 
workers  in  more  than  one  State  and  a  settle- 
ment must  be  made  for  all  at  once.  For  ex- 
ample, the  strike  inaugurated  in  1909  by  the 
Amalgamated  Association  of  Iron,  Steel  and 
Tin  Workers  and  the  Tin  Plate  Workers' 
Protective  Association  against  the  American 
Sheet  and  Tin  Plate  Company  affected  mills 
134 


PROPOSED  NEW  AGENCIES 

in  several  States,  and  the  attempts  of  state 
mediators  to  reach  a  settlement  in  the  mills 
in  their  respective  States  were  necessarily 
doomed  to  failure;  the  strike  had  to  be  set- 
tled as  a  whole.  If  any  one  of  the  large  sys- 
tems of  national  or  district  trade  agreements 
should  be  interrupted  by  a  strike  affecting  all 
the  plants  a  similar  case  would  be  presented. 
If,  for  example,  the  Sanitary  Potters'  Asso- 
ciation or  the  National  Brotherhood  of  Op- 
erative Potters  should  resort  to  a  lockout  or 
strike  against  the  other  party  at  the  expira- 
tion of  an  agreement,  the  mediators  of  one 
State — Ohio,  for  example — could  not  expect 
to  secure  settlements  in  the  sanitary  ware 
potteries  in  that  State  while  the  strike  was 
still  unsettled  in  New  Jersey.  In  all  likeli- 
hood no  settlement  would  be  reached  for  any 
until  a  settlement  was  made  for  all.  The 
greater  experience  in  dealing  with  disputes 
of  more  than  local  character  that  a  national 
135 


MEDIATION  AND  ARBITRATION 

mediator  would  be  expected  to  have,  and  the 
fact  that  he  would  be  an  officer  of  the  United 
States  and  not  merely  an  officer  of  a  State, 
would  give  him  a  much  better  chance  of 
bringing  about  a  settlement  than  a  state 
mediator  would  ordinarily  have. 

Within  recent  years,  the  President  of  the 
United  States  on  several  occasions  has  been 
called  upon  to  protect  the  people  of  a  State 
against  domestic  violence  growing  out  of  an 
industrial  dispute.  It  appears  clear  that 
such  disputes  should  be  included  within  the 
scope  of  the  activity  of  a  national  agency  of 
mediation,  arbitration,  and  investigation. 
At  such  times  the  state  agencies  are  not  in 
a  position  to  exercise  effectively  their  func- 
tions and  if  mediation  or  investigation  is  to 
be  carried  on  it  can  only  be  carried  on  by  a 
national  agency. 

The  desirability  of  providing  a  national 
agency  of  mediation  and  of  assistance  in  ar- 
136 


PROPOSED  NEW  AGENCIES 

bitration,  to  be  available  in  the  four  classes  of 
cases  enumerated  above,  turns  on  the  ques- 
tion as  to  whether  the  work  of  such  an  agency 
would  be  likely  to  be  sufficiently  effective  to 
make  its  establishment  worth  while.  The 
desirability  of  securing  the  settlement  of  such 
disputes  by  joint  agreement  or  through  sub- 
mission to  arbitration  brought  about  through 
voluntary  governmental  mediation — if  set- 
tlements can  be  secured  in  this  way — is  as- 
sumed to  be  beyond  question.  The  expe- 
rience under  the  Erdmann  and  Newlands 
acts,  and  that  of  state  mediators  in  the  three 
States  in  which  the  work  of  state  agencies 
has  been  studied,  indicates  the  strong  proba- 
bility that  a  national  agency  such  as  the  one 
proposed  could  be  of  great  service. 

It  is  not  to  be  expected,  of  course,  that  the 

great  success  of  the  federal  mediators  under 

the  Erdmann  and  Newlards  acts  would  be 

duplicated  in  the  other  fiel  is  which  it  is  pro- 

137 


MEDIATION  AND  ARBITRATION 

posed  to  cover.  The  seriousness  of  the  re- 
sults which  would  follow  immediately  from 
the  interruption  of  railway  train  service  gives 
the  mediators  an  assistance,  in  securing  a 
settlement  or  inducing  the  parties  to  submit 
to  arbitration,  that  would  not  ordinarily  be 
present  in  these  other  cases,  as,  for  example, 
that  of  a  threatened  or  actual  strike  or  lock- 
out of  railway  shopmen.  In  this  latter  class 
of  disputes  there  are,  however,  several  dis- 
tinct ways  in  which  efficient  mediators  can 
aid  in  bringing  about  a  settlement  which  will 
prevent  a  threatened  strike  or  lockout,  or  in 
bringing  an  interruption  of  work  to  a  close 
much  earlier  than  would  otherwise  be  the 
case.  These  types  of  possible  mediatorial 
service  have  been  described  above  in  connec- 
tion with  state  agencies  of  mediation  and 
need  not  be  further  discussed  here.1 

Provision  for  national  mediation  in  the 

1  See  pages  9-46. 

138 


PROPOSED  NEW  AGENCIES 

fields  outlined  above  logically  carries  with  it 
provision  for  the  creation  of  special  boards 
of  arbitration  in  order  to  encourage  the  arbi- 
tration of  disputes  in  these  fields,  which  the 
parties  are  otherwise  unable  to  settle.  Ex- 
perience under  the  Erdmann  and  Newlands 
acts  has  established  the  value  of  making  in 
advance  such  facilitating  arrangements  for 
arbitration. 

Finally,  provision  should  be  made  for  the 
formation  of  special  boards  of  mediation  and 
investigation  in  cases  where  mediation  by  the 
regular  staff  of  mediators  has  failed  to  result 
in  an  agreement  or  in  arbitration,  and  in 
which  mediation  by  a  special  board  is  likely 
to  promote  a  settlement,  or  in  which  a  public 
investigation  followed  by  a  public  report 
is  deemed  desirable.  This  conclusion  is 
based  on  the  results  obtained  through  in- 
vestigation and  recommendation  in  Massa- 
chusetts and  New  York,1  and,  to  a  much 
139 


MEDIATION  AND  ARBITRATION 

greater  extent,  upon  the  results  obtained 
under  the  Canadian  Industrial  Disputes  Act. 

PROPOSED  AGENCIES  OF  MEDIATION,  ARBITRA- 
TION, AND  INVESTIGATION 

The  plans  proposed  for  new  federal 
agencies  of  mediation,  arbitration,  and  in- 
vestigation will  be  outlined  in  that  order. 
The  proposals  include  also  the  creation  of 
an  industrial  council  which  it  is  believed  will 
greatly  further  the  work  of  mediation  and 
will  be  of  service  also  in  the  formation  of 
boards  of  arbitration  and  boards  of  medi- 
ation and  investigation.  The  composition 
and  functions  of  the  proposed  council  will  be 
outlined  in  connection  with  the  plan  for  a 
mediation  commission. 

THE  MEDIATION  COMMISSION 

To  carry  out  the  work  of  national  medi- 
ation, a  mediation  commission  should  be  cre- 


1  See  pages  65-76. 

140 


PROPOSED  NEW  AGENCIES 

ated,  consisting  of  three  persons,  to  be  ap- 
pointed by  the  President.  The  duties  now 
discharged  by  the  board  of  mediation  under 
the  Newlands  Act  should  be  transferred  to 
the  commission.  The  commission  should  be 
empowered  to  appoint  assistant  mediators  as 
occasion  may  require.  It  is  desirable  to  have 
three  members  of  full  rank,  not  in  order  that 
they  should  act  together  as  a  board  in  dis- 
putes, but  to  make  sure  that  a  member  of 
the  board  may  be  available  to  act  promptly 
if  two  or  three  important  disputes  should 
arise  simultaneously.  Each  of  the  me- 
diators should  therefore  be  a  person  of  rec- 
ognized impartiality  in  industrial  issues  and 
without  affiliations  which  would  make  him 
unacceptable  to  either  side  in  labor  contro- 
versies. 

It  is  hardly  necessary  to  say  that  the  of- 
fice of  mediator  should  in  no  way  be  re- 
garded as  a  political  office.     To  avoid  even 
141 


MEDIATION  AND  ARBITRATION 

the  appearance  of  party  bias  the  term  of 
office  of  the  mediators  should  be  long — at 
least  six  years — and  the  mediation  commis- 
sion should  be  distinct  from  any  other  depart- 
ment of  government,  as  are  the  Interstate 
Commerce  Commission  and  the  Trade  Com- 
mission. It  is  for  this  reason  that  the  medi- 
atory functions  of  the  Department  of  Labor 
should  be  turned  over  to  the  mediation  com- 
mission. The  mediators  should  not  be  ap- 
pointed by  a  cabinet  officer,  nor  attached  to 
any  department  under  a  political  head. 

The  danger  of  having  agencies  of  media- 
tion administered  by  the  party  head  of  a  de- 
partment of  government  was  clearly  stated 
by  the  President  of  the  Board  of  Trade  in 
Great  Britain  in  1911 : 

One  disadvantage  of  the  existing  system  is 
undoubtedly  that  it  brings  into  action  and  prom- 
inence the  parliamentary  head  of  the  Board  of 
Trade,  who  is  necessarily  a  politician,  though, 
in  my  opinion,  none  the  worse  for  that,  and  a 

142 


PROPOSED  NEW  AGENCIES 

member  of  the  Government,  into  disputes  and 
conciliation  which  ought  to  be  purely  industrial. 
— If  the  action  of  the  department  in  these  mat- 
ters could  be  still  further  removed  from  the 
sphere  of  politics  or  the  suspicion  of  politics,  it 
would  give  even  greater  confidence  and  there  would 
be  greater  willingness  by  the  parties  to  a  dispute 
to  seek  the  assistance  of  the  Board  of  Trade. 

There  is  an  additional  reason  for  not  at- 
taching the  national  mediation  agency  to  the 
Department  of  Labor.  It  is  generally  un- 
derstood that  the  Department  of  Labor  is 
the  department  of  government  charged  with 
studying  the  conditions  and  needs  of  the 
wage-earners  and  the  best  methods  of  legiti- 
mately advancing  their  interests.  This 
makes  employers  generally  feel  that  the  of- 
ficers of  that  department  are  more  familiar 
with  and  naturally  more  sympathetic  with 
the  wage-earners'  viewpoint  than  with  that 
of  the  employer.  It  may  be  noted  that  when 
the  legislation  embodied  in  the  Newlands 
Act  was  pending,  both  the  representatives  of 
143 


MEDIATION  AND  ARBITRATION 

the  workers'  organizations  and  the  repre- 
sentatives of  the  railroad  companies  opposed 
the  inclusion  of  the  board  of  mediation  within 
the  Department  of  Labor. 

The  commission  should  be  given  consider- 
able discretion  in  the  determination  of  the 
salaries  of  the  assistant  mediators.  It  is 
highly  desirable  that  the  commission  should 
be  free  to  appoint  assistant  mediators  who 
may  have  other  occupations.  The  commis- 
sion would  thus  be  able  to  avail  itself  of  the 
services  of  persons  who  have  a  knowledge  of 
conditions  and  the  confidence  of  employers 
and  workers  in  particular  localities  or  par- 
ticular trades,  but  who  would  not  be  willing 
to  give  up  their  other  occupations  to  accept 
permanent  service  with  the  commission. 

The  commission  should  be  empowered  to 
offer  mediation  in  any  case  in  which  it  is  re- 
quested by  one  or  both  parties,  or  upon  its 
own  initiative  in  any  case  in  which  a  strike  or 
144 


PROPOSED  NEW  AGENCIES 

lockout  has  occurred  or  is  seriously  threat- 
ened. As  has  been  noted  in  a  preceding  sec- 
tion,1 there  are  several  classes  of  disputes  in 
which  provision  for  a  national  agency  of 
mediation  appears  to  be  of  primary  impor- 
tance, and  it  is  to  be  expected  that  in  these 
classes  of  disputes  the  mediation  commis- 
sion will  find  its  chief  activity.  It  appears 
desirable,  however,  to  leave  the  commission 
free  to  decide  for  itself  in  what  disputes  it 
will  intervene. 

It  is  important  that  the  commission  should 
be  empowered  to  act  before  a  strike  or  lock- 
out has  actually  occurred.  It  is  also  very  de- 
sirable that  the  commission  be  allowed  to  act 
without  waiting  for  a  request  for  its  inter- 
vention. Experience  under  the  Erdmann 
Act  clearly  established  this  fact  and  the  New- 
lands  Act  removed  the  limitation  upon  the 
action  of  the  mediators  to  cases  in  which  the 


1  See  pages  125-133. 

145 


MEDIATION  AND  ARBITRATION 

intervention  was  requested  by  one  or  both  of 
the  parties.  The  experience  of  state  medi- 
ators also  leads  to  the  conclusion  that  the 
mediators  should  be  free  to  act  on  their  own 
initiative. 

The  commission  should  also  be  empowered 
to  organize  a  staff  of  trained  investigators. 
These  officers  could  be  employed  to  make 
preliminary  inquiries  in  cases  in  which  strikes 
or  lockouts  have  occurred  or  are  threatened 
and  in  which  the  proffer  of  mediation  is  be- 
ing considered,  and  to  gather  for  the  com- 
mission necessary  information  as  to  condi- 
tions in  industries  in  which  serious  dis- 
turbances have  occurred  or  are  threatened. 

The  commission  should  also  be  empowered 
to  organize  a  sufficient  staff  to  gather  and 
collate  such  information  as  to  conditions  of 
employment  and  industrial  relations  as  it 
deems  necessary  to  have  for  the  proper  per- 
formance of  its  functions.  In  order  for  the 
146 


PROPOSED  NEW  AGENCIES 

commission  to  be  of  the  highest  possible  serv- 
ice, it  is  necessary  that  it  should  have  at  hand 
information  as  to  the  wages  and  conditions 
in  the  various  industries  and  localities  and 
the  cost  of  living  in  different  communities. 
Some  of  this  information  could  be  obtained 
from  agencies  already  in  existence,  but  more 
would  have  to  be  obtained  through  its  own 
agents.  In  order  to  avoid  duplication  and 
to  secure  uniformity  in  methods  of  collecting 
and  compiling  statistics  bearing  upon  these 
matters,  the  commission's  staff  should  co- 
operate with  the  Bureau  of  Labor  Statistics, 
other  federal  agencies,  state  labor  bureaus, 
and  other  state  agencies  engaged  in  similar 
work. 

The  commission  should  also  have  on  its 
staff  persons  who  are  familiar  with  the 
methods  and  devices  employed  in  the  various 
trades  in  which  joint  agreements  have 
worked  out  successfully,  as  well  as  with  the 
147 


MEDIATION  AND  ARBITRATION 

pitfalls  which  experience  shows  must  be 
avoided.  The  commission  would  thus  be  in 
a  position  to  advise  employers  and  em- 
ployees, state  mediators,  and  other  persons 
engaged  in  the  promotion  of  the  amicable 
settlement  of  labor  controversies. 

Industrial  Council. — As  a  part  of  the 
plan,  it  would  be  desirable  to  establish  an  in- 
dustrial council  to  consist  of  an  equal  num- 
ber of  representatives  of  employers'  associa- 
tions and  labor  organizations.  The  Presi- 
dent should  designate  at  least  ten  leading 
employers'  associations  and  ten  leading  or- 
ganizations of  employees,  each  of  which 
should  elect  a  member  of  the  council.  The 
duties  of  the  council  would  be  to  advise  the 
mediation  commission  and  to  advise  the 
President  and  Congress  on  matters  affecting 
mediation,  arbitration,  investigation  and  in- 
dustrial relations  generally.  The  council 
should  prepare  a  panel  of  arbitrators  from 
148 


PROPOSED  NEW  AGENCIES 

which  the  mediation  commission  should 
choose  the  members  of  boards  of  arbitration 
in  cases  in  which  the  members  of  such  boards 
selected  by  the  parties  fail  to  agree  on  the 
two  other  members.  It  should  in  similar 
manner  select  a  panel  from  which  the  medi- 
ation commission  should  select  the  members 
of  boards  of  mediation  and  investigation  in 
case  the  parties  to  the  disputes  do  not  name 
members  or  the  members  so  named  do  not 
agree  upon  a  chairman.  The  council  should 
be  convened  at  least  once  a  year  by  the 
chairman  of  the  mediation  commission,  but  it 
should  have  an  organization  independent  of 
the  commission  and  elect  its  own  chairman 
and  secretary. 

Boards  of  Arbitration — In  the  event  that 
the  parties  to  an  industrial  dispute  agree  to 
submit  a  dispute  to  arbitration,  application 
may  be  made  to  the  mediation  commission 
for  the  formation  of  an  arbitration  board. 
149 


MEDIATION  AND  ARBITRATION 

The  arbitration  provisions  in  the  plan  here 
proposed  are  the  same  as  those  of  the  New- 
lands  Act,1  except  that  if  the  members  of  the 
board  appointed  by  the  parties  fail  to  agree 
on  the  additional  member  or  members,  these 
shall  be  appointed  by  the  mediation  commis- 
sion from  a  list  prepared  by  the  industrial 
council.  It  is  desirable  to  keep  the  media- 
tion commission  as  free  as  possible  from  any 
connection  with  any  board  which  passes  pub- 
lic judgment  on  the  merits  of  a  dispute. 
This  is  advisable  in  order  to  avoid  anything 
which  may  make  either  party  to  a  contro- 
versy feel  that  the  mediators  favor  the  other 
side,  and  also  to  secure  for  the  mediators  full 
frankness  from  both  parties  as  to  the  terms 
they  will  accept,  when  the  mediators  are  en- 
deavoring to  settle  a  dispute  by  acting  as  in- 
termediaries.    The  further  the  commission  is 


1  The  arbitration  provisions  of  the  Newlands  Act 
are  given  in  Appendix  I. 

150 


PROPOSED  NEW  AGENCIES 

removed  from  the  arbitration  to  which  the 
parties  are  to  be  urged  to  submit  if  they  can- 
not be  brought  to  an  agreement,  the  more 
frank  the  parties  will  be,  in  all  likelihood, 
and  the  greater  will  be  the  chances  of  sub- 
mission to  arbitration  if  no  other  solution  is 
found.  Under  the  plan  proposed  the  only 
connection  of  the  mediation  commission  with 
the  boards  of  arbitration  will  be  the  selection 
of  the  members  necessary  to  fill  out  the  board 
from  a  panel  agreed  upon  in  advance  by  the 
industrial  council. 

Boards  of  Mediation  and  Investigation. — 
Provision  should  be  made  for  the  appoint- 
ment of  a  -board  of  mediation  and  investiga- 
tion in  any  dispute  involving  interstate  com- 
merce in  which  the  mediation  commission 
fails  to  bring  about  a  settlement  or  an  agree- 
ment to  submit  to  arbitration,  and  in  which 
the  commission  judges  that  the  appointment 
of  such  a  board  would  be  expedient.  Such  a 
151 


MEDIATION  AND  ARBITRATION 

board  should  also  be  formed  in  those  cases  in 
which  an  industrial  dispute  has  led  to 
domestic  violence  and  to  an  application  to 
the  President  of  the  United  States  for  pro- 
tection, provided  the  President  of  the  United 
States  directs  the  mediation  commission  to 
form  such  a  board. 

These  boards  should  be  made  up  of  one 
member  appointed  by  each  party  to  the  dis- 
pute and  a  third  selected  by  these  two.  The 
persons  nominated  by  the  parties  should  be 
familiar  with  the  business  and  the  issues  in 
dispute,  but  should  not  be  parties  to  the  con- 
troversy. If  either  side  fails  to  nominate  a 
member  within  a  specified  time,  or  the  two 
fail  to  agree  on  a  third,  the  mediation  com- 
mission should  select  the  member  or  mem- 
bers. 

The  function  of  the  board  is  to  inquire  into 
the  nature  and  causes  of  the  dispute  and  en- 
deavor to  bring  the  parties  to  a  settlement  or 

152 


PROPOSED  NEW  AGENCIES 

to  an  agreement  to  submit  to  arbitration. 
If  the  board  fails  in  this,  it  is  to  make  a  pub- 
lic statement  of  the  salient  facts  and  a  recom- 
mendation of  the  terms  which  should  be  ac- 
cepted as  a  settlement  of  the  dispute. 

The  boards  of  mediation  and  investiga- 
tion should  have  power  to  compel  the  at- 
tendance of  witnesses  and  their  testimony 
under  oath  and  the  production  of  books  and 
papers  which  it  believes  to  contain  informa- 
tion pertinent  to  the  controversy  under  in- 
vestigation. It  should  have  power  to  con- 
duct investigations  outside  its  own  sittings, 
through  expert  investigators.  It  is  not  pro- 
posed, however,  to  give  the  board  power  to 
enforce  its  recommendation  or  to  prohibit  the 
parties'  resorting  to  a  strike  or  lockout  either 
before  or  after  its  investigation  and  recom- 
mendations. 


VI 

PROPOSED  PLAN  OF  A  NATIONAL  SYSTEM 
OF  MEDIATION,  INVESTIGATION,  AND 
ARBITRATION 

ORGANIZATION 

1.  Mediation  Commission. — A  mediation 
commission  shall  be  created,  consisting  of 
three  members  appointed  by  the  President 
with  the  advice  and  consent  of  the  Senate. 
The  members  shall  be  impartial  in  their  re- 
lations to  capital  and  labor.  The  members 
shall  serve  for  terms  of  six  years. 

2.  Industrial  Council. — The  President  of 
the  United  States  shall  designate  at  least  ten 
leading  organizations  of  employers  and  ten 
leading  organizations  of  employees  to  ap- 
point representatives  to  act  as  an  advisory 
body  to  the  President,  to  Congress,  and  to 

154 


A  NATIONAL  SYSTEM 

the  mediation  commission.  This  body  shall 
be  known  as  the  Industrial  Council.  It  shall 
give  advice  regarding  the  duties  of  the  com- 
mission, the  administration  of  its  affairs,  the 
selection  of  mediators,  and  shall  make  rec- 
ommendations regarding  legislation.  The 
council  shall  also  prepare  lists  of  persons  who 
may  be  called  upon  to  serve  on  boards  of 
arbitration  and  on  boards  of  mediation  and 
investigation.  The  council  shall  be  called 
together  at  least  once  a  year  by  the  chairman 
of  the  mediation  commission ;  it  shall  have  an 
organization  independent  of  the  commission 
and  elect  its  own  chairman  and  secretary. 
The  commission  may  appoint  the  members  of 
the  council  to  assist  in  its  work  in  the  same 
way  as  it  appoints  its  subordinate  officers. 
The  members  of  the  council  shall  be  paid 
traveling  and  other  necessary  expenses  and 
such  compensation  as  may  be  determined 
upon.  Provision  shall  be  made  for  the  re- 
155 


MEDIATION  AND  ARBITRATION 

moval  of  members  by  the  organization  which 
they  represent. 

3.  Subordinate  Officers  and  Assistants. — 
The  commission  shall  have  power  to  appoint, 
remove  at  pleasure,  and  fix  the  compensation 
of  a  secretary  (and  a  limited  number  of 
clerks).  The  appointment  of  other  officers 
and  assistants,  such  as  mediators,  examiners, 
investigators,  technical  assessors,  experts, 
disbursing  officer,  clerks,  and  other  em- 
ployees, shall  be  subject  to  the  Civil  Service 
rules.  The  commission  shall  select  a  com- 
mittee from  its  own  membership  which  the 
Civil  Service  Commission  shall  include  in 
the  Board  of  Examiners  for  conducting  ex- 
aminations and  preparing  lists  of  eligibles 
for  such  subordinate  officers  and  employees 
as  are  required  to  have  special  knowledge  or 
training.  Such  examinations  shall  include  a 
thorough  investigation  of  the  education, 
training,  and  experience  of  the  applicants, 
156 


A  NATIONAL  SYSTEM 

their  success  in  handling  men,  and  their 
ability  in  executive  affairs,  in  order  to  de- 
termine their  relative  capacity  and  fitness  for 
the  office  or  position  to  which  they  seek  to  be 
appointed.  If  so  required,  applicants  shall 
appear  before  the  Board  of  Examiners  for 
an  oral  examination.  Additional  rules  and 
regulations  concerning  such  examinations 
may  be  made  by  joint  action  of  the  Civil 
Service  Commission  and  the  committee  of 
the  Mediation  Commission.  Employees  of 
the  commission  who  are  to  act  as  mediators 
shall  be  permitted  to  accept  appointments  as 
officers  of  state  or  local  governments  if  the 
duties  thereof  do  not  interfere  with  their 
duties  to  the  commission.  The  commission 
shall  be  authorized  to  appoint,  without  re- 
gard to  Civil  Service  rules,  officers  of  state 
or  local  governments  to  represent  the  com- 
mission. An  employee  of  the  commission 
shall  be  permitted  to  continue  with  his  pri- 
157 


MEDIATION  AND  ARBITRATION 

vate  business  if  the  duties  thereof  are  not  in- 
consistent with  his  duties  to  the  council. 

POWERS,  DUTIES,  AND  JURISDICTION 

4.  In  Interstate  Commerce. — a.  Medi- 
ation. Whenever  a  controversy  concerning 
conditions  of  employment  arises  between  em- 
ployer and  employees  engaged  in  interstate 
commerce,  either  party  may  apply  to  the 
chairman  of  the  Mediation  Commission  for 
its  services  in  the  bringing  about  of  an 
amicable  adjustment  of  the  controversy. 
Or  the  chairman  of  the  commission  shall  be 
authorized  to  offer,  on  his  own  initiative,  the 
services  of  the  commission.  If  efforts  to 
bring  about  an  amicable  adjustment  through 
mediation  should  be  unsuccessful,  the  com- 
mission shall  at  once,  if  possible,  induce  the 
parties  to  submit  their  differences  to  arbitra- 
tion. 

b.  Arbitration.  Procedure  shall  be  simi- 
lar to  that  outlined  in  the  Newlands  Act.1 
158 


A  NATIONAL  SYSTEM 

If  it  is  necessary  for  the  mediation  commis- 
sion to  appoint  arbitrators,  they  shall  be 
taken  from  a  list  prepared  by  the  industrial 
council. 

c.  Boards  of  mediation  and  investiga- 
tion. If  the  parties  to  the  controversy  can- 
not be  induced  to  arbitrate,  and  if  the  contro- 
versy should  threaten  to  interrupt  the  busi- 
ness of  employers  and  employees  to  the  detri- 
ment of  the  public  interest,  the  commission 
shall  be  authorized  to  provide,  at  its  discre- 
tion, for  the  creation  of  a  board  of  mediation 
and  investigation  consisting  of  three  mem- 
bers. Of  the  three  members  of  the  board, 
one  shall  be  selected  by  the  employers,  one 
by  the  employees,  and  a  third  on  the  rec- 
ommendation of  the  members  so  chosen. 
The  members  selected  by  the  employers 
and  employees  shall  not  have  any  direct 
financial  interest  in  the  dispute.    If  either 

1  This  act  is  given  in  Appendix  I. 
159 


MEDIATION  AND  ARBITRATION 

side  fails  to  recommend  a  member,  he  shall 
be  appointed  by  the  commission.  If  after 
a  stated  time  the  third  member  is  not 
recommended,  the  commission  shall  select 
him.  Appointments  to  boards  of  mediation 
and  investigation  shall  be  made  by  the  com- 
mission from  a  list  prepared  for  this  purpose 
by  the  industrial  council.  The  board  of 
mediation  and  investigation  shall  offer  its 
friendly  offices  in  bringing  about  a  settle- 
ment of  the  dispute  through  mediation.  If 
mediation  should  not  be  successful  and  if  the 
parties  to  the  controversy  refuse  to  arbitrate, 
this  board  shall  have  power  to  make  an  in- 
vestigation of  the  controversy,  and  shall  be 
required  to  submit  to  the  commission  a  full 
report  thereon,  including  recommendations 
for  its  settlement.  This  report  and  recom- 
mendation shall  be  given  adequate  publicity, 
d.  Compulsory  Powers.  A  board  of 
mediation  and  investigation  shall  have  power 
160 


A  NATIONAL  SYSTEM 

to  administer  oaths,  to  subpena  and  compel 
the  attendance  of  witnesses  and  the  produc- 
tion of  books,,  papers,  documents,  etc.,  to  con- 
duct hearings  and  investigations,  and  to  ex- 
ercise such  other  powers  as  may  be  necessary. 
They  shall  not  have  power  to  prohibit,  or  to 
impose  penalties  for,  strikes  or  lockouts. 

5.  Not  in  Interstate  Commerce. — It  shall 
be  provided  that  the  commission,  or  a  board 
of  mediation  and  investigation  created  by  it 
may  exercise  the  foregoing  powers,  except 
the  compulsory  powers  under  Subdivision  d 
of  Proposal  4,  for  settling  industrial  contro- 
versies between  parties  not  engaged  in  inter- 
state commerce. 

6.  On  Request  of  the  State  in  which  the 
Controversy  Exists. — A  board  of  mediation 
and  investigation  may  exercise  all  the  fore- 
going powers  for  settling  industrial  contro- 
versies within  any  State,  if  the  legislature  or 
the  executive  of  the  State  has  requested  pro- 

161 


MEDIATION  AND  ARBITRATION 

tection  against  domestic  violence  and  the 
formation  of  such  a  board  by  the  mediation 
commission  has  been  directed  by  the  Presi- 
dent of  the  United  States. 

COOPERATION 

7.  Cooperation  with  State  and  Local 
Authorities. — The  commission  shall  be  au- 
thorized and  directed  to  cooperate  with 
state,  local,  and  territorial  authorities  and 
similar  departments  of  foreign  countries 
which  deal  with  the  adjustment  of  industrial 
disputes. 

8.  Cooperation  with  Other  Federal 
Agencies. — The  commission,  as  far  as  prac- 
ticable, shall  coordinate  its  activities  with  and 
cooperate  with  other  Federal  departments  in 
the  performance  of  their  duties.  The  Secre- 
tary of  Labor  and  Secretary  of  Commerce 
should  be  ex-officio  advisors  to  the  commis- 
sion. 

162 


m 

APPENDICES 


APPENDIX  I 

THE  NEWLANDS  ACT 

An  Act  Providing  for  mediation,  conciliation,  and 
arbitration  in  controversies  between  certain  employers 
and  their  employees. 

Be  it  enacted  by  the  Senate  and  House  of  Rep- 
resentatives of  the  United  States  of  America  in 
Congress  assembled,  That  the  provisions  of  this 
Act  shall  apply  to  any  common  carrier  or  car- 
riers and  their  officers,  agents,  and  employees,  ex- 
cept masters  of  vessels  and  seamen,  as  defined 
in  section  forty-six  hundred  and  twelve,  Revised 
Statutes  of  the  United  States,  engaged  in  the 
transportation  of  passengers  or  property  wholly 
by  railroad,  or  partly  by  railroad  and  partly  by 
water,  for  a  continuous  carriage  or  shipment 
from  one  State  or  Territory  of  the  United  States 
or  the  District  of  Columbia  to  any  other  State  or 
Territory  of  the  United  States  or  the  District  of 
Columbia,  or  from  any  place  in  the  United  States 
to  an  adjacent  foreign  country,  or  from  any  place 
in  the  United  States  through  a  foreign  country 
to  any  other  place  in  the  United  States. 
165 


APPENDIX  I 

The  term  "railroad"  as  used  in  this  Act  shall 
include  all  bridges  and  ferries  used  or  operated  in 
connection  with  any  railroad,  and  also  all  the  road 
in  use  bj  any  corporation  operating  a  railroad, 
whether  owned  or  operated  under  a  contract, 
agreement,  or  lease;  and  the  term  "transporta- 
tion" shall  include  all  instrumentalities  of  ship- 
ment or  carriage. 

The  term  "employees"  as  used  in  this  Act  shall 
include  all  persons  actually  engaged  in  any  ca- 
pacity in  train  operation  or  train  service  of  any 
description,  and  notwithstanding  that  the  cars 
upon  or  in  which  they  are  employed  may  be  held 
and  operated  by  the  carrier  under  lease  or  other 
contract:  Provided,  however,  That  this  Act  shall 
not  be  held  to  apply  to  employees  of  street  rail- 
roads and  shall  apply  only  to  employees  engaged 
in  railroad  train  service.  In  every  such  case  the 
carrier  shall  be  responsible  for  the  acts  and  de- 
faults of  such  employees  in  the  same  manner  and 
to  the  same  extent  as  if  said  cars  were  owned  by 
it  and  said  employees  directly  employed  by  it,  and 
any  provisions  to  the  contrary  of  any  such  lease 
or  other  contract  shall  be  binding  only  as  be- 
tween the  parties  thereto  and  shall  not  affect  the 
obligations  of  said  carrier  either  to  the  public  or 
to  the  private  parties  concerned. 
166 


APPENDIX  I 

A  common  carrier  subject  to  the  provisions  of 
this  Act  is  hereinafter  referred  to  as  an  "em- 
ployer," and  the  employees  of  one  or  more  of 
such  carriers  are  hereinafter  referred  to  as  "em- 
ployees." 

Sec.  2.  That  whenever  a  controversy  concern- 
ing wages,  hours  of  labor,  or  conditions  of  em- 
ployment shall  arise  between  an  employer  or  em- 
ployers and  employees  subject  to  this  Act  inter- 
rupting or  threatening  to  interrupt  the  business 
of  said  employer  or  employers  to  the  serious 
detriment  of  the  public  interest,  either  party  to 
such  controversy  may  apply  to  the  Board  of  Me- 
diation and  Conciliation  created  by  this  Act  and 
invoke  its  services  for  the  purpose  of  bringing 
about  an  amicable  adjustment  of  the  controversy; 
and  upon  the  request  of  either  party  the  said 
board  shall  with  all  practicable  expedition  put  it- 
self in  communication  with  the  parties  to  such 
controversy  and  shall  use  its  best  efforts,  by  medi- 
ation and  conciliation,  to  bring  them  to  an  agree- 
ment; and  if  such  efforts  to  bring  about  an 
amicable  adjustment  through  mediation  and  con- 
ciliation shall  be  unsuccessful,  the  said  board  shall 
at  once  endeavor  to  induce  the  parties  to  submit 
their  controversy  to  arbitration  in  accordance 
with  the  provisions  of  this  Act. 
167 


APPENDIX  I 

In  any  case  in  which  an  interruption  of  traffic 
is  imminent  and  fraught  with  serious  detriment  to 
the  public  interest,  the  Board  of  Mediation  and 
Conciliation  may,  if  in  its  judgment  such  action 
seem  desirable,  proffer  its  services  to  the  respec- 
tive parties  to  the  controversy. 

In  any  case  in  which  a  controversy  arises  over 
the  meaning  or  the  application  of  any  agreement 
reached  through  mediation  under  the  provisions  of 
this  Act  either  party  to  the  said  agreement  may 
apply  to  the  Board  of  Mediation  and  Concilia- 
tion for  an  expression  of  opinion  from  such  board 
as  to  the  meaning  or  application  of  such  agree- 
ment and  the  said  board  shall  upon  receipt  of 
such  request  give  its  opinion  as  soon  as  may  be 
practicable. 

Sec.  3.  That  whenever  a  controversy  shall 
arise  between  an  employer  or  employers  and  em- 
ployees subject  to  this  Act,  which  can  not  be  set- 
tled through  mediation  and  conciliation  in  the 
manner  provided  in  the  preceding  section,  such 
controversy  may  be  submitted  to  the  arbitration 
of  a  board  of  six,  or,  if  the  parties  to  the  contro- 
versy prefer  so  to  stipulate,  to  a  board  of  three 
persons,  which  board  shall  be  chosen  in  the  follow- 
ing manner :  In  the  case  of  a  board  of  three,  the 
employer  or  employers  and  the  employees,  parties 
168 


APPENDIX  I 

respectively  to  the  agreement  to  arbitrate,  shall 
each  name  one  arbitrator ;  and  the  two  arbitrators 
thus  chosen  shall  select  the  third  arbitrator;  but 
in  the  event  of  their  failure  to  name  the  third  ar- 
bitrator within  five  days  after  their  first  meeting, 
such  third  arbitrator  shall  be  named  by  the  Board 
of  Mediation  and  Conciliation.  In  the  case  of  a 
board  of  six,  the  employer  or  employers  and  the 
employees,  parties  respectively  to  the  agreement 
to  arbitrate,  shall  each  name  two  arbitrators,  and 
the  four  arbitrators  thus  chosen  shall,  by  a  ma- 
jority vote,  select  the  remaining  two  arbitrators; 
but  in  the  event  of  their  failure  to  name  the  two 
arbitrators  within  fifteen  days  after  their  first 
meeting  the  said  two  arbitrators,  or  as  many  of 
them  as  have  not  been  named,  shall  be  named  by 
the  Board  of  Mediation  and  Conciliation. 

In  the  event  that  the  employees  engaged  in  any 
given  controversy  are  not  members  of  a  labor  or- 
ganization, such  employees  may  select  a  committee 
which  shall  have  the  right  to  name  the  arbitrator, 
or  the  arbitrators,  who  are  to  be  named  by  the 
employees  as  provided  above  in  this  section. 

Sec.  4.     That  the  agreement  to  arbitrate — 

First.  Shall  be  in  writing; 

Second.  Shall  stipulate  that  the  arbitration  is 
had  under  the  provisions  of  this  Act; 
169 


APPENDIX  I 

Third.  Shall  state  whether  the  board  of  arbitra- 
tion is  to  consist  of  three  or  six  members ; 

Fourth.  Shall  be  signed  by  duly  accredited  rep- 
resentatives of  the  employer  or  employers  and  of 
the  employees; 

Fifth.  Shall  state  specifically  the  questions  to  be 
submitted  to  the  said  board  for  decision ; 

Sixth.  Shall  stipulate  that  a  majority  of  said 
board  shall  be  competent  to  make  a  valid  and  bind- 
ing award; 

Seventh.  Shall  fix  a  period  from  the  date  of  the 
appointment  of  the  arbitrator  or  arbitrators  nec- 
essary to  complete  the  board,  as  provided  for  in 
the  agreement,  within  which  the  said  board  shall 
commence  its  hearings ; 

Eighth.  Shall  fix  a  period  from  the  beginning 
of  the  hearings  within  which  the  said  board  shall 
make  and  file  its  award:  Provided,  That  this 
period  shall  be  thirty  days  unless  a  different  pe- 
riod be  agreed  to ; 

Ninth.  Shall  provide  for  the  date  from  which 
the  award  shall  become  effective  and  shall  fix  the 
period  during  which  the  said  award  shall  continue 
in  force; 

Tenth.  Shall  provide  that  the  respective  par- 
ties to  the  award  will  each  faithfully  execute  the 
same; 

170 


APPENDIX  I 

Eleventh.  Shall  provide  that  the  award  and 
the  papers  and  proceedings,  including  the  testi- 
mony relating  thereto,  certified  under  the  hands 
of  the  arbitrators,  and  which  shall  have  the  force 
and  effect  of  a  bill  of  exceptions,  shall  be  filed  in 
the  clerk's  office  of  the  district  court  of  the  United 
States  for  the  district  wherein  the  controversy 
arises  or  the  arbitration  is  entered  into,  and  shall 
be  final  and  conclusive  upon  the  parties  to  the 
agreement  unless  set  aside  for  error  of  law  ap- 
parent on  the  record ; 

Twelfth.  May  also  provide  that  any  differ- 
ence arising  as  to  the  meaning  or  the  application 
of  the  provisions  of  an  award  made  by  a  board  of 
arbitration  shall  be  referred  back  to  the  same 
board  or  to  a  subcommittee  of  such  board  for  a 
ruling,  which  ruling  shall  have  the  same  force  and 
effect  as  the  original  award;  and  if  any  member 
of  the  original  board  is  unable  or  unwilling  to 
serve  another  arbitrator  shall  be  named  in  the 
same  manner  as  such  original  member  was  named. 

Sec.  5.  That  for  the  purposes  of  this  Act  the 
arbitrators  herein  provided  for,  or  either  of  them, 
shall  have  power  to  administer  oaths  and  affirma- 
tions, sign  subpenas,  require  the  attendance  and 
testimony  of  witnesses,  and  the  production  of  such 
books,  papers,  contracts,  agreements,  and  docu- 

171 


APPENDIX  I 

merits  material  to  a  just  determination  of  the  mat- 
ters under  investigation  as  may  be  ordered  by 
the  court;  and  may  invoke  the  aid  of  the  United 
States  courts  to  compel  witnesses  to  attend  and 
testify  and  to  produce  such  books,  papers,  con- 
tracts, agreements,  and  documents  to  the  same  ex- 
tent and  under  the  same  conditions  and  penalties 
as  is  provided  for  in  the  Act  to  regulate  commerce, 
approved  February  fourth,  eighteen  hundred  and 
eighty-seven,  and  the  amendments  thereto. 

Sec.  6.  That  every  agreement  of  arbitration 
under  this  Act  shall  be  acknowledged  by  the  par- 
ties thereto  before  a  notary  public  or  a  clerk  of 
the  district  or  the  circuit  court  of  appeals  of  the 
United  States,  or  before  a  member  of  the  Board 
of  Mediation  and  Conciliation,  the  members  of 
which  are  hereby  authorized  to  take  such  acknowl- 
edgments ;  and  when  so  acknowledged  shall  be  de- 
livered to  a  member  of  said  board  or  transmitted 
to  said  board  to  be  filed  in  its  office. 

When  such  agreement  of  arbitration  has  been 
filed  with  the  said  board,  or  one  of  its  members, 
and  when  the  said  board,  or  a  member  thereof, 
has  been  furnished  the  names  of  the  arbitrators 
chosen  by  the  respective  parties  to  the  contro- 
versy, the  board,  or  a  member  thereof,  shall  cause 
a  notice  in  writing  to  be  served  upon  the  said  arbi- 
172 


APPENDIX  I 

trators,  notifying  them  of  their  appointment,  re- 
questing them  to  meet  promptly  to  name  the  re- 
maining arbitrator  or  arbitrators  necessary  to 
complete  the  board,  and  advising  them  of  the 
period  within  which,  as  provided  in  the  agreement 
of  arbitration,  they  are  empowered  to  name  such 
arbitrator  or  arbitrators. 

When  the  arbitrators  selected  by  the  respective 
parties  have  agreed  upon  the  remaining  arbitrator 
or  arbitrators,  they  shall  notify  the  Board  of  Me- 
diation and  Conciliation ;  and  in  the  event  of  their 
failure  to  agree  upon  any  or  upon  all  of  the  nec- 
essary arbitrators  within  the  period  fixed  by  this 
Act  they  shall,  at  the  expiration  of  such  period, 
notify  the  Board  of  Mediation  and  Conciliation  of 
the  arbitrators  selected,  if  any,  or  of  their  failure 
to  make  or  to  complete  such  selection. 

If  the  parties  to  an  arbitration  desire  the  recon- 
vening of  a  board  to  pass  upon  any  controversy 
arising  over  the  meaning  or  application  of  an 
award,  they  shall  jointly  so  notify  the  Board  of 
Mediation  and  Conciliation,  and  shall  state  in 
such  written  notice  the  question  or  questions  to 
be  submitted  to  such  reconvened  board.  The 
Board  of  Mediation  and  Conciliation  shall  there- 
upon promptly  communicate  with  the  members  of 
the  board  of  arbitration  or  a  subcommittee  of  such 
173 


APPENDIX  I 

board  appointed  for  such  purpose  pursuant  to  the 
provisions  of  the  agreement  of  arbitration,  and 
arrange  for  the  reconvening  of  said  board  or  sub- 
committee, and  shall  notify  the  respective  parties 
to  the  controversy  of  the  time  and  place  at  which 
the  board  will  meet  for  hearings  upon  the  matters 
in  controversy  to  be  submitted  to  it. 

Sec.  7.  That  the  board  of  arbitration  shall 
organize  and  select  its  own  chairman  and  make 
all  necessary  rules  for  conducting  its  hearings ; 
but  in  its  award  or  awards  the  said  board  shall  con- 
fine itself  to  findings  or  recommendations  as  to  the 
questions  specifically  submitted  to  it  or  matters 
directly  bearing  thereon.  All  testimony  before 
said  board  shall  be  given  under  oath  or  affirma- 
tion, and  any  member  of  the  board  of  arbitration 
shall  have  the  power  to  administer  oaths  or  af- 
firmations. It  may  employ  such  assistants  as  may 
be  necessary  in  carrying  on  its  work.  It  shall, 
whenever  practicable,  be  supplied  with  suitable 
quarters  in  any  Federal  building  located  at  its 
place  of  meeting  or  at  any  place  where  the  board 
may  adjourn  for  its  deliberations.  The  board  of 
arbitration  shall  furnish  a  certified  copy  of  its 
awards  to  the  respective  parties  to  the  contro- 
versy, and  shall  transmit  the  original,  together  with 
the  papers  and  proceedings  and  a  transcript  of 
174 


APPENDIX  I 

the  testimony  taken  at  the  hearings,  certified  un- 
der the  hands  of  the  arbitrators,  to  the  clerk  of 
the  district  court  of  the  United  States  for  the  dis- 
trict wherein  the  controversy  arose  or  the  arbitra- 
tion is  entered  into,  to  be  filed  in  said  clerk's 
office  as  provided  in  paragraph  eleven  of  section 
four  of  this  Act.  And  said  board  shall  also  fur- 
nish a  certified  copy  of  its  award,  and  the  papers 
and  proceedings,  including  the  testimony  relating 
thereto,  to  the  Board  of  Mediation  and  Concilia- 
tion, to  be  filed  in  its  office. 

The  United  States  Commerce  Court,  the  Inter- 
State  Commerce  Commission,  and  the  Bureau  of 
Labor  Statistics  are  hereby  authorized  to  turn 
over  to  the  Board  of  Mediation  and  Conciliation 
upon  its  request  any  papers  and  documents  here- 
tofore filed  with  them  and  bearing  upon  mediation 
or  arbitration  proceedings  held  under  the  provi- 
sions of  the  Act  approved  June  first,  eighteen  hun- 
dred and  ninety-eight,  providing  for  mediation  and 
arbitration. 

Sec.  8.  That  the  award,  being  filed  in  the 
clerk's  office  of  a  district  court  of  the  United 
States  as  hereinbefore  provided,  shall  go  into 
practical  operation,  and  judgment  shall  be  entered 
thereon  accordingly  at  the  expiration  of  ten  days 
from  such  filing,  unless  within  such  ten  days  either 
175 


APPENDIX  I 

party  shall  file  exceptions  thereto  for  matter  of 
law  apparent  upon  the  record,  in  which  case  said 
award  shall  go  into  practical  operation,  and  judg- 
ment be  entered  accordingly,  when  such  exceptions 
shall  have  been  finally  disposed  of  either  by  said 
district  court  or  on  appeal  therefrom. 

At  the  expiration  of  ten  days  from  the  decision 
of  the  district  court  upon  exceptions  taken  to  said 
award  as  aforesaid  judgment  shall  be  entered  in 
accordance  with  said  decision,  unless  during  said 
ten  days  either  party  shall  appeal  therefrom  to 
the  circuit  court  of  appeals.  In  such  case  only 
such  portion  of  the  record  shall  be  transmitted  to 
the  appellate  court  as  is  necessary  to  the  proper 
understanding  and  consideration  of  the  questions 
of  law  presented  by  said  exceptions  and  to  be  de- 
cided. 

The  determination  of  said  circuit  court  of  ap- 
peals upon  said  questions  shall  be  final,  and,  be- 
ing certified  by  the  clerk  thereof  to  said  district 
court,  judgment  pursuant  thereto  shall  thereupon 
be  entered  by  said  district  court. 

If  exceptions  to  an  award  are  finally  sustained, 
judgment  shall  be  entered  setting  aside  the  award 
in  whole  or  in  part;  but  in  such  case  the  parties 
may  agree  upon  a  judgment  to  be  entered  dispos- 
ing of  the  subject  matter  of  the  controversy, 
176 


APPENDIX  I 

which  judgment  when  entered  shall  have  the  same 
force  and  effect  as  judgment  entered  upon  an 
award. 

Nothing  in  this  Act  contained  shall  be  con- 
strued to  require  an  employee  to  render  personal 
service  without  his  consent,  and  no  injunction  or 
other  legal  process  shall  be  issued  which  shall  com- 
pel the  performance  by  any  employee  against  his 
will  of  a  contract  for  personal  labor  or  service. 

Sec.  9.  That  whenever  receivers  appointed  by 
a  Federal  court  are  in  the  possession  and  control 
of  the  business  of  employers  covered  by  this  Act 
the  employees  of  such  employers  shall  have  the 
right  to  be  heard  through  their  representatives  in 
such  court  upon  all  questions  affecting  the  terms 
and  conditions  of  their  employment ;  and  no  reduc- 
tion of  wages  shall  be  made  by  such  receivers  with- 
out the  authority  of  the  court  therefor,  after  no- 
tice to  such  employees,  said  notice  to  be  given  not 
less  than  twenty  days  before  the  hearing  upon  the 
receivers'  petition  or  application,  and  to  be  posted 
upon  all  customary  bulletin  boards  along  or  upon 
the  railway  or  in  the  customary  places  on  the 
premises  of  other  employers  covered  by  this  Act. 

Sec.  10.  That  each  member  of  the  board  of 
arbitration  created  under  the  provisions  of  this 
Act  shall  receive  such  compensation  as  may  be 

177 


APPENDIX  I 

fixed  by  the  Board  of  Mediation  and  Conciliation, 
together  with  his  traveling  and  other  necessary  ex- 
penses. The  sum  of  $25,000,  or  so  much  thereof 
as  may  be  necessary,  is  hereby  appropriated,  to 
be  immediately  available  and  to  continue  avail- 
able until  the  close  of  the  fiscal  year  ending  June 
thirtieth,  nineteen  hundred  and  fourteen,  for  the 
necessary  and  proper  expenses  incurred  in  con- 
nection with  any  arbitration  or  with  the  carry- 
ing on  of  the  work  of  mediation  and  conciliation, 
including  per  diem,  traveling,  and  other  necessary 
expenses  of  members  or  employees  of  boards  of  ar- 
bitration and  rent  in  the  District  of  Columbia, 
furniture,  office  fixtures  and  supplies,  books,  sal- 
aries, traveling  expenses,  and  other  necessary  ex- 
penses of  members  or  employees  of  the  Board  of 
Mediation  and  Conciliation,  to  be  approved  by  the 
chairman  of  said  board  and  audited  by  the  proper 
accounting  officers  of  the  Treasury. 

Sec.  11.  There  shall  be  a  Commissioner  of 
Mediation  and  Conciliation,  who  shall  be  ap- 
pointed by  the  President,  by  and  with  the  advice 
and  consent  of  the  Senate,  and  whose  salary  shall 
be  $7,500  per  annum,  who  shall  hold  his  office  for 
a  term  of  seven  years  and  until  a  successor  quali- 
fies, and  who  shall  be  removable  by  the  President 
only  for  misconduct  in  office.  The  President 
178 


APPENDIX  I 

shall  also  designate  not  more  than  two  other  offi- 
cials of  the  Government  who  have  been  appointed 
by  and  with  the  advice  and  consent  of  the  Senate, 
and  the  officials  thus  designated,  together  with  the 
Commissioner  of  Mediation  and  Conciliation,  shall 
constitute  a  board  to  be  known  as  the  United 
States  Board  of  Mediation  and  Conciliation. 

There  shall  also  be  an  Assistant  Commissioner 
of  Mediation  and  Conciliation,  who  shall  be  ap- 
pointed by  the  President,  by  and  with  the  advice 
and  consent  of  the  Senate,  and  whose  salary  shall 
be  $5,000  per  annum.  In  the  absence  of  the  Com- 
missioner of  Mediation  and  Conciliation,  or  when 
that  office  shall  become  vacant,  the  assistant  com- 
missioner shall  exercise  the  functions  and  perform 
the  duties  of  that  office.  Under  the  direction  of 
the  Commissioner  of  Mediation  and  Conciliation, 
the  assistant  commissioner  shall  assist  in  the  work 
of  mediation  and  conciliation  and  when  acting 
alone  in  any  case  he  shall  have  the  right  to  take  ac- 
knowledgments, receive  agreements  of  arbitration, 
and  cause  the  notices  in  writing  to  be  served  upon 
the  arbitrators  chosen  by  the  respective  parties  to 
the  controversy,  as  provided  for  in  section  five  of 
this  Act. 

The  Act  of  June  first,  eighteen  hundred  and 
ninety-eight,  relating  to  the  mediation  and  arbi- 
179 


APPENDIX  I 

tration  of  controversies  between  railway  com- 
panies and  certain  classes  of  their  employees  is 
hereby  repealed :  Provided,  That  any  agreement  of 
arbitration  which,  at  the  time  of  the  passage  of 
this  Act,  shall  have  been  executed  in  accordance 
with  the  provisions  of  said  Act  of  June  first, 
eighteen  hundred  and  ninety-eight,  shall  be  gov- 
erned by  the  provisions  of  said  Act  of  June  first, 
eighteen  hundred  and  ninety-eight,  and  the  pro- 
ceedings thereunder  shall  be  conducted  in  accord- 
ance with  the  provisions  of  said  Act. 
Approved  July  15,  1918. 


APPENDIX  II 

REPORT  OF  THE  COMMISSION  ON  INDUS- 
TRIAL RELATIONS 

The  report  of  Mr.  Basil  M.  Manly,  Director  of 
Research  and  Investigation,  contained  the  follow- 
ing statement  and  recommendations  tenth  reference 
to  agencies  of  mediation,  investigation,  and  arbi- 
tration.1 

The  result  of  the  very  extensive  investigations 
which  have  been  made  regarding  the  agencies  for 
mediation  and  arbitration  in  this  country  and 
abroad  have  been  embodied  in  the  plan  for  legis- 
lation which  is  attached  hereto.  The  plan  as  pre- 
sented is  limited  to  a  National  System,  but  it  is 
recommended  that  the  State  legislatures  should 
enact  legislation  along  the  same  general  lines. 
The  general  principles  which  have  governed 
in  drawing  up  this  plan  may  be  stated  as  fol- 
lows: 


1  Final  Report  of  the  Commission  on  Industrial  Re- 
lations, 1915,  pp.  194-201. 
181 


APPENDIX  II 

1.  The  Mediation  Commission  should  be  inde- 
pendent of,  and  definitely  divorced  from,  every 
other  department  of  the  State  or  Federal  Gov- 
ernment. Its  only  power  grows  out  of  its  im- 
partiality and  this  can  not  be  secured  if  it  is 
subordinate  to  any  other  body  whose  sympa- 
thies either  with  labor  or  with  capital  can  be 
questioned. 

2.  Mediation  should  be  entrusted  to  a  person  as 
far  as  possible  distinct  from  those  who  act  as 
arbitrators  or  appoint  arbitrators. 

3.  The  office  of  mediator  should  be  placed  beyond 
the  suspicion  that  the  office  is  being  used  as  a 
reward  for  party  services. 

4.  The  mediator  should  appoint  his  own  subordi- 
nates. 

5.  It  is  desirable  in  the  event  of  the  failure  of 
mediation  by  an  official  mediator,  that  the  par- 
ties should  be  asked  to  consent  to  the  appoint- 
ment of  a  Board  of  Mediation  and  Investiga- 
tion consisting  of  three  persons,  one  selected  by 
each  party  and  the  third  by  these  two.  Such 
a  board,  it  appears,  would  be  able  to  secure  an 
agreement  in  many  cases  where  the  mediator 
fails.  These  boards  should  have  power  to  sum- 
mon witnesses  and  compel  the  production  of 
papers.     In  the  event  that  the  board  could  not 

182       ' 


APPENDIX  II 

secure  an  agreement  during  the  investigation, 
it  should  be  empowered  to  make  a  public  report 
stating  the  terms  on  which,  in  its  judgment, 
the  parties  should  settle. 

6.  In  those  cases  in  which  the  parties  are  unable  to 
agree  on  the  third  member  of  the  Board  of  Me- 
diation and  Investigation,  he  should  be  ap- 
pointed in  the  State  Systems  by  the  State 
Board  of  Arbitration,  and  in  the  National  Sys- 
tem by  the  mediators,  from  a  list  prepared  in 
advance  by  an  Advisory  Board,  consisting  of 
ten  representatives  of  employers'  associations 
and  ten  representatives  of  trade  unions. 

7.  National  Boards  of  Mediation  and  Investiga- 
tion are  to  be  formed  only  in  disputes  involv- 
ing interstate  commerce  and  in  those  cases  in 
which  the  legislature  or  the  executive  of  a  State 
has  requested  the  intervention  of  the  Federal 
Government. 

8.  The  Secretary  of  Labor,  or  in  the  States  the 
official,  bureau  or  commission  which  is  created 
for  the  protection  of  the  workers,  should  be 
empowered  to  appear  before  the  Board  of 
Mediation  and  Investigation,  when  it  is  holding 
public  hearings,  either  at  the  request  of  the 
board  as  amicus  curiae,  in  the  ascertainment  of 
facts  regarding  labor   conditions,   or,   if  ap- 

183 


APPENDIX  II 

pealed  to,  as  the  spokesman  for  the  employees 
in  the  presentation  of  their  case. 

PROPOSED   PLAN  OF  A   NATIONAL  SYSTEM  OF 

MEDIATION,  INVESTIGATION  AND 

ARBITRATION 

ORGANIZATION 

1.  Scope  of  Authority. 

The  National  Mediation  Commission  should  be 
given  exclusive  authority  to  intervene,  under  the 
conditions  hereinafter  defined,  in  all  industrial  dis- 
putes involving  any  corporation,  firm,  or  estab- 
lishment except  public  service  establishments, 
which  is  engaged  in  interstate  commerce  or  whose 
products  enter  into  interstate  or  foreign  com- 
merce. 

This  provision  differentiates  its  functions  from 
those  of  the  Mediation  Commission  existing  at 
present  under  the  Newlands  Act.  It  is  consid- 
ered desirable  for  the  present  to  provide  for  the 
existence  of  the  two  commissions,  at  least  until  the 
proposed  commission  has  been  thoroughly  tested. 
It  is  believed  to  be  wise,  however,  to  provide  for 
their  close  cooperation  from  the  very  beginning, 
with  the  idea  that  they  will  ultimately  be  consoli- 
dated. 

184 


APPENDIX  II 

It  will  be  noted  that  this  provision  also  will 
have  the  effect  of  supplanting  the  mediation  pow- 
ers which  are  now  vested  in  the  Department  of 
Labor.  There  is  no  desire  to  criticise  or  belittle 
the  past  activities  of  the  mediators  operating  un- 
der the  Department  of  Labor,  for  such  criticism 
is  absolutely  unwarranted.  It  is  also  freely  ad- 
mitted that  the  Department  of  Labor  has  not  had 
either  the  time  or  the  resources  necessary  for  the 
proper  development  of  this  function.  The  pro- 
posal is  made,  however,  primarily  upon  three 
grounds  which  seem  to  be  sound  and,  in  fact,  com- 
pelling: First,  the  function  of  mediation  depends 
absolutely  upon  the  permanent  assurance  of  im- 
partiality. The  Department  of  Labor  was  cre- 
ated to  represent  the  interests  of  labor  and  it 
seems  not  only  inevitable  but  desirable  and  proper 
that  the  Secretary  of  Labor  should  always  be 
drawn  from  the  ranks  of  organized  labor.  The 
function  of  mediation  may  be  administered  with 
absolute  impartiality  under  any  particular  Secre- 
tary, or  even  under  every  Secretary,  and  yet  it 
seems  impossible,  even  under  such  conditions,  to 
create  that  absolute  assurance  of  impartiality 
which  is  the  prime  essential.  Second,  it  is  the  pre- 
rogative and  duty  of  the  Department  of  Labor 
to  act,  aggressively  if  need  be,  for  the  protection 
185 


APPENDIX  II 

of  the  workers  at  all  times,  and  to  utilize  every  re- 
source at  its  command  to  give  them  that  protec- 
tion. The  Department  must  necessarily  be 
greatly  impeded  in  such  frankly  partisan  action, 
it  would  seem,  if  it  must  at  the  same  time  preserve 
either  the  substance  or  the  shadow  of  impartiality 
in  carrying  out  its  function  of  mediation.  Third, 
in  the  bitterest  disputes,  where  the  public  interest 
most  strongly  demands  intervention,  mediation  is 
seldom  successful,  and  a  stage  is  quickly  reached 
where  the  most  vital  necessity  is  for  the  full  and 
exact  facts  regarding  the  dispute,  in  order  that 
public  opinion  may  be  intelligently  formed  and  di- 
rected. Experience  has  shown  that  such  facts  can 
best  be  secured  fully,  quickly,  and  effectively 
through  the  medium  of  public  inquiry.  This 
means  that  the  inquiring  body  must  have  power  to 
summon  witnesses,  compel  the  production  of 
books  and  papers,  and  compel  testimony,  or  the 
proceeding  is  worse  than  a  farce.  It  may  be  re- 
garded as  certain  that  such  powers  will  never  be 
entrusted  to  the  Department  of  Labor. 

#.  Membership. 

The    members    of    the    Mediation    Commission 
should  be  appointed  by  the  President  with  the  ad- 
vice and  consent  of  the  Senate.     The  members 
186 


APPENDIX  II 

should  represent  in  proper  balance  the  interests 
of  employers,  employees,  and  the  public.  The 
members  should  serve  for  terms  of  six  years. 

8.  Advisory  Board. 

The  President  of  the  United  States  should 
designate  an  equal  number  of  leading  organiza- 
tions of  employers  and  leading  organizations  of 
employees  to  appoint  representatives  to  act  as  an 
advisory  body  to  the  President,  to  Congress,  and 
to  the  Mediation  Commission.  This  body,  desig- 
nated hereinafter  the  Advisory  Board,  should  give 
advice  regarding  the  duties  of  the  commission,  the 
administration  of  its  affairs  and  the  selection  of 
mediators,  and  be  empowered  to  make  recom- 
mendations regarding  legislation.  The  Advisory 
Board  should  also  prepare  lists  of  persons  who 
may  be  called  upon  to  serve  on  boards  of  arbitra- 
tion and  on  boards  of  mediation  and  investigation. 
The  Advisory  Board  should  be  called  together  at 
least  once  a  year  by  the  Chairman  of  the  Media- 
tion Commission;  it  should  have  an  organization 
independent  of  the  commission  and  elect  its  own 
chairman  and  secretary. 

The  members  of  the  Advisory  Board  should  be 

paid  traveling  and  other  necessary  expenses  and 

such  compensation  as  may  be  determined  upon. 

Provision   should   be   made   for   the   removal    of 

187 


APPENDIX  II 

members  by  the  organizations  which  they  repre- 
sent. 

If..  Subordinate  Officers  and  Assistants. 

The  Mediation  Commission  should  have  power 
to  appoint,  remove  at  pleasure,  and  fix  the  com- 
pensation of  a  secretary  (and  a  limited  number 
of  clerks).  The  appointment  of  other  officers  and 
assistants,  such  as  mediators,  examiners,  investi- 
gators, technical  assessors,  experts,  disbursing  of- 
ficer, clerks,  and  other  employees,  should  be  sub- 
ject to  the  Civil  Service  rules.  But  arrangements 
should  be  made  to  have  the  examination  include 
experience  and  other  proper  qualifications,  and  to 
give  the  Mediation  Commission  power  to  examine 
all  candidates  orally. 

POWERS,    DUTIES,    AND    JUBISDICTION 

5.  In  Interstate  Commerce. 

(a)  Mediation:  Whenever  a  controversy  con- 
cerning conditions  of  employment  arises  between 
employer  and  employees  engaged  in  interstate 
commerce  other  than  public  service  corporations, 
either  party  should  be  able  to  apply  to  the  chair- 
man of  the  Mediation  Commission  for  its  services 
in  the  bringing  about  of  an  amicable  adjustment 
of  the  controversy.  Or,  the  chairman  of  the  com- 
188 


APPENDIX  II 

mission  should  be  authorized  to  offer,  on  his  own 
initiative,  the  services  of  the  mediators  of  the 
commission.  If  efforts  to  bring  about  an  ami- 
cable adjustment  through  mediation  should  be  un- 
successful, the  commission  should  at  once,  if  pos- 
sible, induce  the  parties  to  submit  their  differences 
to  arbitration. 

(b)  Arbitration:  Procedure  should  be  similar 
to  that  outlined  in  the  Newlands  Act.  If  it  is  nec- 
essary for  the  Mediation  Commission  to  appoint 
arbitrators,  they  should  be  taken  from  a  list  pre- 
pared by  the  Advisory  Board. 

(c)  Boards  of  Mediation  and  Investigation: 
If  the  parties  to  the  controversy  can  not  be  in- 
duced to  arbitrate,  and  if  the  controversy  should 
threaten  to  interrupt  the  business  of  employers 
and  employees  to  the  detriment  of  the  public  in- 
terest, the  commission  should  be  authorized  to  re- 
quest the  two  parties  to  consent  to  the  creation  of 
a  Board  of  Mediation  and  Investigation.  If  the 
consent  of  the  parties  to  the  controversy  is  se- 
cured, the  commission  shall  form  such  a  board. 
Of  the  three  members  of  the  board,  one  should  be 
selected  by  the  employers,  one  by  the  employees, 
and  a  third  on  the  recommendation  of  the  members 
so  chosen.  If  either  side  fails  to  recommend  a 
member,  he  should  be  appointed  by  the  commis- 

189 


APPENDIX  II 

sion.  If  after  a  stated  time  the  third  member  is 
not  recommended,  the  commission  should  select 
him.  Appointments  to  boards  of  mediation  and 
investigation  shall  be  made  by  the  commission 
from  a  list  prepared  for  this  purpose  by  the  Ad- 
visory board.  The  Board  of  Mediation  and  In- 
vestigation should  offer  its  friendly  offices  in 
bringing  about  a  settlement  of  the  dispute  through 
mediation.  If  mediation  should  not  be  success- 
ful and  if  the  parties  to  the  controversy  refuse  to 
arbitrate,  this  board  should  have  power  to  make 
an  investigation  of  the  controversy,  and  should 
be  required  to  submit  to  the  commission  a  full  re- 
port thereon,  including  recommendations  for  its 
settlement.  The  commission  should  be  empow- 
ered to  give  this  report  and  recommendations  ade- 
quate publicity. 

(d)  Powers  to  Secure  Evidence:  A  Board  of 
Mediation  and  Investigation  should  have  power  to 
administer  oaths,  to  subpena  and  compel  the  at- 
tendance and  testimony  of  witnesses,  and  the  pro- 
duction of  books,  papers,  documents,  etc.,  and 
to  conduct  hearings  and  investigations,  and  to 
exercise  such  other  similar  powers  as  might  be 
necessary.  It  should  not  have  power  to  pro- 
hibit, or  to  impose  penalties  for,  strikes  or  lock- 
outs. 

190 


APPENDIX  II 

6.  Not  in  Interstate  Commerce. 

It  should  be  provided  that  the  commission,  or 
a  Board  of  Mediation  and  Investigation  created 
by  it,  may  exercise  the  foregoing  powers  except 
the  compulsory  powers  under  subdivision  "d"  of 
Proposal  5,  for  settling  industrial  controversies 
between  parties  not  engaged  in  interstate  com- 
merce, if  they  are  requested  to  do  so  by  the  Gov- 
ernor or  legislature  of  a  State,  or  by  the  mayor, 
council,  or  commission  of  a  municipality. 

7.  The  Secretary  of  Labor  and  the  Secretary 
of  Commerce  should  be  authorized  to  bring  to  the 
attention  of  the  commission  any  dispute  in  which 
the  intervention  of  the  commission  seems  desir- 
able. The  Secretary  of  Labor,  or  such  officer  as 
he  may  designate,  should  also  be  authorized  to 
appear  before  any  Board  of  Mediation  and  Inves- 
tigation, either  at  the  request  of  the  board  as 
amicus  curiae  for  the  ascertainment  of  facts  re- 
garding labor  conditions,  or,  if  appealed  to,  as  a 
spokesman  for  the  employees  in  the  presentation 
of  their  case. 

COOPERATION 

8.  Cooperation  with  State  and  Local  'Authorities. 

The  commission  should  be  authorized  and  di- 
191 


APPENDIX  II 

rected  to  cooperate  with  state,  local,  and  terri- 
torial authorities  and  similar  departments  of  for- 
eign countries  which  deal  with  the  adjustment  of 
industrial  disputes. 

9.  Cooperation  with  Other  Federal  Agencies. 

The  commission  should,  as  far  as  practicable, 
coordinate  its  activities  and  cooperate  with  other 
Federal  departments  in  the  performance  of  their 
duties. 

The  report  of  Mr.  Manly  as  a  whole  was  signed 
by  Chairman  Frank  P.  Walsh,  and  Commissioners 
John  B.  Lennon,  James  O'Connell,  and  Austin  B. 
Garretson.  All  of  those  signing  the  report  of 
Mr.  Manly  wrote  also  supplemental  statements 
which  contain  refetences  to  the  section  of  the  re- 
port relating  to  agencies  of  mediation,  investiga- 
tion, and  arbitration.  The  sections  of  these  sup- 
plemental reports  dealing  with  the  subject  are 
contained  in  Appendix  HI, 


APPENDIX  III 

REPORT  OF  THE  COMMISSION  ON  INDUS- 
TRIAL RELATIONS 

The  supplemental  statement  of  Commissioners' 
John  B.  Lennon  and  James  O'Connell  contains  the 
following  passage  relating  to  the  subject:  * 

EXTENT    OP    UNREST 

The  principal  duty  imposed,  under  the  law  cre- 
ating the  commission,  was  to  seek  to  ascertain 
the  causes  of  industrial  unrest  and  offer  such  rec- 
ommendations as  we  believe  might  alleviate  that 
unrest.  There  can  be  no  question  but  that  un- 
rest exists,  in  some  instances,  to  an  alarming  ex- 
tent. Thousands  and  tens  of  thousands  of  our 
people  feel  that  they  are  deprived,  under  existing 
conditions  in  industry,  of  an  opportunity  to  se- 
cure for  themselves  and  their  families  a  standard 
of  living  commensurate  with  the  best  ideals  of 
manhood,  womanhood,  and  childhood.     They  re- 

1  Final  Report  of  the  Commission  on  Industrial  Re- 
lations, 1915,  pp.  283-286. 

193 


APPENDIX  III 

sent  the  fact  that  the  existing  system  of  the  dis- 
tribution of  wealth  creates  at  one  end  of  our 
industrial  scale  a  few  multi-millionaires  and  at  the 
other  end  thousands  and  tens  of  thousands  of 
men,  women,  and  children  who  are  at  all  times  in 
a  situation  where  they  are  uncertain  as  to  where 
their  next  meal  will  come  from.  Hungry,  poorly 
clothed,  and  without  the  opportunities  that  a 
fully  rounded  life  requires,  they  become  filled  with 
a  sullen  resentment  that  bodes  no  good  for  the  fu- 
ture of  our  Republic. 

We  have  found  men  and  women  who  are  inclined 
to  ascribe  this  condition  to  the  fact  that  the  Gov- 
ernment exercises  no  power  of  mandatory  char- 
acter to  prevent  strikes  and  lockouts.  Many 
have  been  the  propositions  submitted  to  us  for 
compulsory  arbitration  or,  at  least,  compulsory 
investigation  with  power  to  recommend  a  settle- 
ment. Some  have  proposed  an  elaborate  machin- 
ery to  be  set  up  by  the  general  Government,  and 
of  a  similar  character  by  the  States,  providing 
for  conciliation,  mediation,  arbitration,  and  inves- 
tigation, all  of  which,  while  without  definite  com- 
pulsory features,  establish  a  legal  machinery  that 
must  of  necessity  exercise  an  influence  in  that  di- 
rection. 

The  plan  for  the  creation  of  an  industrial  com- 
194 


APPENDIX  III 

mission,  both  National  and  State,  proposes  to 
assign  to  a  commission  of  three  members  the  ad- 
ministration of  all  labor  laws  of  either  State  or 
Nation,  giving  to  them  powers  far  in  excess  of 
those  exercised  by  the  President  of  the  United 
States,  or  the  Governor  of  any  State.  This  we 
believe  to  be  Bureaucracy  run  mad,  and  a  subver- 
sion of  Democracy  dangerous  to  the  civil  and  so- 
cial liberty  of  all  citizens.  We  hold  that  all 
power  should  be  in  the  final  analysis  with  the 
people,  and  we  therefore,  dissent  from  any  such 
plan. 

NEW   GOVERNMENTAL.   MACHINERY    UNWISE 

The  activities  of  such  a  commission  supple- 
mented by  the  proposed  advisory  committees  of 
employers  and  labor  representatives  would  be  so 
balanced  as  to  prevent  substantial  progress,  and 
tend  to  perpetuate  present  conditions.  Such  a 
plan  conceives  of  labor  and  capital  as  static  forces 
and  of  the  relations  between  them  as  always  to  re- 
main unchanging. 

We  believe  that  the  work  now  being  done  by 
the  Department  of  Labor  in  industry  generally, 
and  by  the  Board  of  Mediation  and  Conciliation, 
dealing  with  interstate  public  utilities,  is  better 
than  any  that  could  be  expected  of  any  additional 
195 


APPENDIX  III 

board  that  has  been  suggested  to  this  commis- 
sion. We  believe  that  the  Department  of  Labor, 
with  further  experience  and  larger  appropria- 
tions, will  develop  a  high  state  of  efficiency  in  ad- 
justing labor  disputes  that  are  capable  of  being 
adjusted  by  any  one  other  than  the  parties  di- 
rectly interested,  and  will  adequately  carry  on  the 
work  provided  by  the  law  creating  the  Department 
of  Labor,  to  wit : 

Section  1.  The  purpose  of  the  Department 
of  Labor  shall  be  to  foster,  promote,  and  de- 
velop the  welfare  of  the  wage  earners  in  the 
United  States,  to  improve  their  working  condi- 
tions, and  to  advance  their  opportunities  for 
profitable  employment. 

Section  8.     The  Secretary  of  Labor  shall 
have  power  to  act  as  mediator  and  to  appoint 
commissioners  of  conciliation  in  labor  disputes 
whenever  in  his  judgment  the  interests  of  indus- 
trial peace  require  it  to  be  done. 
We  favor  the  extension  of  the  Newlands  Act  to 
cover  all   employees  engaged  in   interstate   com- 
merce, such  as  the  railroad  telegraphers,  the  shop 
and  track  men  employed  by  railroads,   the  em- 
ployees   of   express    companies,    of   the   Pullman 
Company,  of  commercial  telegraph  and  telephone 
companies,  and  other  public  utilities  performing 
196 


APPENDIX  III 

interstate  service  that,  in  the  interest  of  the  Na- 
tion, must  be  continuous. 

The  evidence  submitted  to  this  commission  is 
substantially  to  the  effect  that  where  trade  union 
organization  exists  among  the  workers,  there,  at 
the  same  time,  exists  the  least  amount  of  indus- 
trial unrest  of  a  character  that  is  dangerous  to 
the  peace  and  welfare  of  our  nation.  It  is  true 
that  the  union  men  and  women  are  not  satisfied 
with  their  conditions ;  they  are  not,  however,  de- 
spondent as  to  the  possibility  of  securing  better 
conditions ;  they  know  what  the  unions  have  accom- 
plished, and  they  have  an  abiding  faith  that  their 
further  desires  can  be  attained. 

Instead  of  any  elaborate  machinery  for  the 
prevention  of  strikes  or  lockouts  we  are  convinced, 
from  the  testimony  gathered  by  this  commission, 
that  the  most  effectual  course  that  can  be  pur- 
sued to  bring  about  general  contentment  among 
our  people,  based  upon  a  humane  standard  of  liv- 
ing, is  the  promotion  of  labor  organization.  The 
most  casual  investigator  will  soon  discover  that  in 
those  lines  of  industry  where  organization  of  labor 
is  the  strongest,  there  is  the  least  danger  of  in- 
dustrial revolt  that  would  endanger  the  fundamen- 
tal principles  of  our  Government  and  the  main- 
tenance of  a  nation  with  respect  for  law  and  or- 
197 


APPENDIX  III 

der.  Where  organization  is  lacking,  dangerous 
discontent  is  found  on  every  hand ;  low  wages  and 
long  hours  prevail;  exploitation  in  every  direc- 
tion is  practiced;  the  people  become  sullen,  have 
no  regard  for  law  or  government  and  are,  in  real- 
ity, a  latent  volcano,  as  dangerous  to  society  as 
are  the  volcanoes  of  nature  to  the  landscape  sur- 
rounding them. 

The  supplemental  statement  of  Commissioner 
Austin  B.  Garretson  contains  the  following  pas- 
sages relating  to  the  subject:  l 

My  signature  is  appended  to  the  Report  of 
Mr.  Basil  M.  Manly,  Director  of  Research  and 
Investigation  of  the  United  States  Commission  on 
Industrial  Relations,  submitted  to  the  commission 
and  transmitted  herewith,  as  to  the  findings  of  fact 
contained  therein. 

I  am  in  general  agreement  with  the  recommen- 
dations contained  in  that  Report  except  as  to 
the  formation  of  the  system  of  State  and  Fed- 
eral Commissions  and  a  Federal  Industrial  Coun- 
cil. 

On  this  recommendation  I  neither  approve  nor 
condemn.     But  out  of  regard  for  the  opinion  of 

1  Final  Report  of  the  Commission  on  Industrial  Re- 
lations, 1915,  p.  291. 

198 


APPENDIX  III 

the  great  body  of  intra-state  labor  most  directly 
affected,  I  dissent.  .  .  . 

I  am  favorable  to  the  extension  of  the  provi- 
sions of  the  Newlands  Act  to  all  classes  of  inter- 
state employees  who  can  constitutionally  be 
brought  under  its  provisions  and  would  favor  the 
enlargement  of  the  body  administering  it  to  meet 
the  added  responsibilities  which  would  thereby  be 
placed  upon  it,  but  limiting  the  powers  thereof  to 
the  settlement  of  industrial  disagreements  and  to 
the  gathering  of  information  germane  to  their  mis- 
sion. 

I  favor  the  creation  of  state  commissions,  simi- 
larly constituted  and  acting  in  corelation  and  un- 
derstanding with  the  Federal  Board. 

I  heartily  concur  with  the  Report  of  Commis- 
sioners Lennon  and  O'Connell  except  on  those 
points  where  disagreement  is  herein  noted.  I  dis- 
sent in  whole  from  the  report  rendered  by  Commis- 
sioner J.  R.  Commons. 

The  supplemental  statement  of  Chairman 
Frank  P.  Walsh  contains  the  following  passage 
relating  to  the  subject :  1 

Although  I  have  signed  the   report  prepared 

1  Final  Report  of  the  Commission  on  Industrial  Re- 
lations, 1915,  p.  302. 

199 


APPENDIX  III 

by  Mr.  Basil  M.  Manly,  Director  of  Research  and 
Investigation,  because  I  believe  it  represents  an 
unassailable  statement  of  the  existing  industrial 
situation,  because  it  fully  complies  with  the  re- 
quirements of  the  Act  of  Congress  creating  the 
commission,  and  because  the  recommendations  are 
as  a  whole  wise  and  necessary  for  the  welfare  of 
the  Nation,  I,  nevertheless,  desire  to  record  my 
dissent  on  the  following  points — 

1.  The  recommendation  for  new  administra- 
tive machinery  for  mediation  and  arbitration  in 
the  form  of  a  special  commission.  I  believe  that 
the  commission  created  by  the  Newlands  Act,  and 
the  Department  of  Labor,  if  their  powers  are  en- 
larged and  they  are  adequately  supported,  will  be 
fully  able  to  deal  with  the  situation.  .  .  . 


APPENDIX  IV 

REPORT  OF  THE  COMMISSION  ON  INDUS- 
TRIAL RELATIONS 

The  report  of  Commissioners  John  R.  Com' 
mons  and  Florence  J.  Harriman  contains  the  fol- 
lowing recommendations  relating  to  mediation,  *»- 
vestigation,  and  arbitration.1 

MEDIATION  AND  MINIMUM  WAGE 

The  Industrial  Commission  (State  or  Federal) 
shall  appoint,  remove  and  fix  the  compensation 
of  a  chief  mediator  of  industrial  disputes.  The 
chief  mediator  to  hold  his  position  until  removed 
by  the  Industrial  Commission  and  to  appoint  such 
assistants  as  may  be  needed,  and  to  fix  their  com- 
pensation with  the  approval  of  the  Industrial  Com- 
mission. He  should  appoint  temporary  mediators 
for  special  cases,  without  requiring  them  to  give 
up  their  private  business  or  offices. 

The  chief  mediator  and  all  assistant  mediators 


1  Final  Report  of  the  Commission  on  Industrial  Re- 
lations, 1915,  pp.  364-366,  376-377. 
201 


APPENDIX  IV 

to  be  selected  from  an  eligible  list  prepared  by 
the  Civil  Service  Commission  on  a  nonassembled 
examination,  with  the  assistance  of  the  Industrial 
Commission  and  the  Advisory  Council. 

The  chief  mediator  and  his  staff  to  have  no 
powers  whatever  of  compulsory  testimony  and  to 
be  prohibited  from  arbitrating  any  dispute,  from 
making  any  public  recommendation,  or  from  re- 
vealing in  any  way,  directly  or  indirectly,  any 
information  which  they  may  have  secured  from 
any  parties  relative  to  an  industrial  dispute. 
Any  violation  to  be  sufficient  ground  for  im- 
mediate removal  by  the  Industrial  Commission. 
The  powers  of  the  mediators  to  be  those  solely 
of  voluntary  mediation  or  conciliation  but  the 
chief  mediator  shall  offer  his  services  in  confi- 
dence to  both  sides  of  a  dispute  which,  in  his 
judgment,  is  of  public  importance. 

The  chief  mediator  and  his  staff  to  be  wholly 
independent  of  the  Industrial  Commission,  except 
as  to  appointment  and  removal,  to  the  extent  that 
they  be  prohibited  from  reporting  any  facts  or 
recommendations  whatever  to  the  Industrial  Com- 
mission or  any  other  authority,  relative  to  the 
merits  of  any  industrial  dispute. 

In  case  the  mediator  is  unable  to  secure  an 
agreement  through  conciliation,  he  shall  recom- 
202 


APPENDIX  IV 

mend  arbitration  to  both  parties,  and  if  both  con- 
sent to  abide  by  the  decision  of  arbitrators  he 
shall  proceed  to  assist  them  in  selecting  a  board 
of  arbitration  in  any  way,  and  consisting  of  any 
number  of  members,  that  both  sides  may  agree 
upon.  If  agreement  is  not  reached  within  a  speci- 
fied time  on  the  third  party  to  the  board  of  media- 
tion, the  chief  mediator  shall  appoint  the  same. 

In  case  both  parties  do  not  consent  to  arbitra- 
tion the  mediator  shall  recommend  the  appoint- 
ment of  a  board  of  mediation  and  investigation, 
which  shall  have  power  to  make  public  its  find- 
ings and  recommendations,  but  such  recommenda- 
tions shall  not  be  binding  on  any  person.  If 
both  parties  shall  consent  to  such  a  board  the 
mediator  shall  assist  them  in  creating  the  same, 
and  shall  appoint  the  third  member  if  the  par- 
ties can  not  agree  on  the  same  within  a  speci- 
fied number  of  days. 

In  case  both  parties  accept  either  a  board  of 
arbitration  or  a  board  of  mediation  and  investi- 
gation, such  board,  as  the  case  may  be,  shall  have 
power  of  compelling  testimony.  The  "Newlands 
Act"  and  the  Department  of  Labor  act  should  be 
so  amended  that  all  mediation  and  conciliation, 
whether  on  railways  or  in  other  industries,  shall 
be  consolidated  under  the  mediator  of  the  Fed- 
203 


APPENDIX  IV 

eral  Industrial  Commission.  The  Federal  Com- 
mission should  cooperate  with  State  mediators. 

In  the  case  of  women  and  children,  minimum 
wage  boards  should  be  created  by  the  state  indus- 
trial commissions. 

The  foregoing  recommendation  is  intended  to 
provide  for  strictly  "voluntary"  methods  of 
mediation  and  arbitration.  When  engaged  in  this 
branch  of  its  work  the  commission  is  not  only  pro- 
hibited from  using  its  compulsory  powers,  but  its 
mediation  work  is  so  rigidly  separated  from  its 
other  work  that  it  can  not  even  be  suspected  of 
using  the  coercive  power  of  Government  to  favor 
either  side.  The  mediator  and  his  staff  are  to 
be  strictly  confidential  advisors  to  the  opposing 
interests,  without  the  power  of  Government,  or 
even  the  threat  of  using  that  power,  to  coerce 
either  side  of  a  collective  dispute.  If  coercion 
is  used  in  the  form  of  "  compulsory  testimony" 
it  is  only  with  the  previous  voluntary  consent  of 
both  sides.  .  .  . 

After  considering  all  forms  of  Governmental 
compulsion  in  collective  disputes  and  even  admit- 
ting their  partial  success  in  other  countries,  we 
conclude  that,  on  the  whole,  in  this  country,  as 
much  can  be  accomplished  in  the  long  run  by 
strictly  voluntary  methods  as  by  compulsory  meth- 
204 


APPENDIX  IV 

ods  of  avoiding  strikes  and  lockouts.  It  can  not 
be  expected  that  strikes  and  lockouts  can  be  abol- 
ished altogether.  Even  countries  with  compulsory 
systems  have  not  succeeded  in  preventing  all  of 
them.  In  our  country,  the  voluntary  method  in 
collective  bargaining  avoids  the  much  more  serious 
evil  of  discrediting  the  agencies  of  Government 
which  must  be  looked  to  for  impartial  enforcement 
of  laws  affecting  the  individual  labor  contract.  It 
is  to  the  enactment  and  enforcement  of  laws  pro- 
tecting laborers  as  individuals  that  we  must  look 
for  the  removal  of  underlying  causes  of  indus- 
trial unrest  and  for  the  eventual  reduction  of 
strikes  that  now  spring  from  the  cumulative  abuses 
that  individuals  suffer  without  other  effective 
remedies.  But  the  removal  of  these  abuses  can 
not  be  accomplished  without  the  efficient  and  non- 
partisan administration  of  laws,  and  this  is  the 
main  purport  of  our  recommendation  for  indus- 
trial commissions  to  regulate  the  individual  labor 
contract. 

The  report  of  Commissioners  Commons  and 
Harriman  was  signed  also  by  Commissioners  Har- 
ris Wemstock,  S.  Thurston  Ballard,  and  Richard 
H.  Aishton.  Commissioners  Weinstock,  Ballard, 
and  Aishton  made  also  a  joint  supplemental  re- 
205 


APPENDIX  IV 

port  in  which  the  following  passage  relating  to  the 
subject  occurs:1 

We  concur  in  the  report  prepared  by  Commis- 
sioner Commons,  dissenting,  however,  on  the  two 
following  points,  and  supplementing  it  by  cer- 
tain other  findings  and  recommendations  following 
herewith.  .  .  . 

Second.  We  further  dissent  from  said  report 
in  its  limitation  of  public  inquiry  in  labor  dis- 
putes only  to  cases  where  both  sides  invite  such 
inquiry.  We  believe  that  in  the  public  interest 
there  are  times  when  compulsion  in  labor  dis- 
putes is  thoroughly  justified.  We  feel,  with  or- 
ganized labor,  that  there  should  be  no  restriction 
put  upon  the  right  to  strike,  realizing  as  we  do, 
that  the  strike  is  the  only  weapon  which,  in  the 
interest  of  labor,  can  be  effectively  and  legally 
used  to  aid  in  bettering  its  conditions.  We  feel, 
also,  that  there  should  be  no  restriction  placed 
upon  the  employer  in  his  right  to  declare  a  lock- 
out in  order  to  better  protect  what  he  regards  as 
his  interest,  and  we  therefore  would  not  favor  any 
plan  that  would  inflict  penalties  upon  the  worker 
or  upon  the  employer  for  declaring  a  strike  or 
lockout. 


1  Final  Report  of  the  Commission  on  Industrial  Re- 
lations, 1915,  pp.  407,  409-411. 
206 


APPENDIX  IV 

Where  the  two  sides  to  a  labor  controversy  are 
fairly  well  balanced  in  strength,  the  winning  side 
must  depend,  in  the  last  analysis,  upon  the  sup- 
port of  public  opinion.  Public  opinion,  there- 
fore, becomes  a  most  important  factor  in  the  in- 
terest of  industrial  peace.  Such  public  opinion, 
however,  to  be  of  value,  must  be  enlightened. 
Under  prevailing  conditions  this  is  almost  im- 
possible. All  that  the  public  is  now  able  to  get, 
as  a  rule,  are  garbled  and  ex  parte  statements, 
more  or  less  misleading  and  unreliable,  which  sim- 
ply tend  to  confuse  the  public  mind. 

Where  strikes  and  lockouts  take  place  on  a 
large  scale,  and  more  especially  in  connection  with 
public  utilities,  the  public  inevitably  becomes  a 
third  party  to  the  issue,  in  that  it  has  more  at 
stake  than  both  parties  to  the  dispute  combined. 
For  example,  if  the  street  railways  of  a  large 
city  are  tied  up,  the  loss  to  the  railway  com- 
panies in  the  way  of  revenue,  and  to  the  workers 
in  the  way  of  wages,  is  great,  but  this  loss  be- 
comes insignificant  compared  with  the  loss  in- 
flicted upon  the  rest  of  the  community,  to  say 
nothing  of  the  annoyance,  inconvenience,  and  men- 
ace to  life  and  property,  which  not  infrequently 
occur  in  such  industrial  disputes.  The  public, 
therefore,  as  the  third  party  to  the  issue,  is  jus- 
207 


APPENDIX  IV 

tified  in  demanding  that  an  investigation  take 
place,  and  that  the  facts  be  ascertained  and  pre- 
sented in  an  impartial  spirit  to  the  general  pub- 
lic, so  that  ways  and  means  may  be  found  of  ad- 
judicating the  dispute  or  of  throwing  the  influence 
of  a  properly  informed  public  opinion  on  the  side 
which  has  the  right  in  its  favor. 

We,  therefore,  earnestly  recommend  that  in  the 
case  of  public  utilities,  the  proposed  industrial 
commission  shall  not  only  have  power  to  mediate 
and  conciliate,  but  also,  at  the  request  of  either 
side  to  a  dispute,  or  upon  the  initiative  of  the  com- 
mission itself,  should  have  the  power,  all  volun- 
tary methods  having  failed,  to  undertake  a  com- 
pulsory public  inquiry  when,  in  the  discretion  of 
the  commission,  public  interest  demands  it;  that 
it  be  given  the  fullest  powers  to  summon  wit- 
nesses, place  them  under  oath,  demand  books  and 
documents,  all  with  a  view  of  ascertaining  the 
underlying  causes  of  the  dispute  and  the  issues 
involved,  to  the  end  of  making  recommendations 
that,  in  the  judgment  of  the  board  of  inquiry,  con- 
sisting of  three  members,  one  to  be  chosen  by 
each  side  and  the  third  to  be  chosen  by  these  two, 
would  be  a  fair  and  reasonable  settlement  of  the 
points  in  dispute.  It  being  understood,  how- 
ever, that  neither  side  is  obliged  to  accept  such 
208 


APPENDIX  IV 

recommendations,  but  may  continue  to  strike  or 
lock  out,  as  the  case  may  be.  Meanwhile,  how- 
ever, the  public  will  have  ascertained  in  the  most 
reliable  way,  the  issues  involved,  the  facts  as  they 
have  been  found  by  the  board  of  inquiry,  and  the 
basis  upon  which  a  fair  settlement  can  be  estab- 
lished, thus  enabling  the  public  more  intelligently 
to  throw  its  support  where  it  rightfully  belongs. 

(1) 


■JJJjERN  REGIONAL  LIBRARY  FACILITY 

AA      000  029  963    6 


